Financial Literacy Chapter 7

Balance Transfer Fee

A fee that may be charged to cardholders for transferring a balance from one card to another.

Billing Cycle

schedule of recurrent times in any regular system of preparing or sending bills

buying plan

an organized method for making good buying decisions

cash advance fee

fee for withdrawing cash on your credit account

charge card

A payment type that works just like credit cards except the balance must be paid in full every month.

collateral

A security pledged for the repayment of a loan.

Consumer loans

loans made for specific purposes using formally negotiated contracts that specify the borrowing terms and repayment

credit

An arrangement to receive cash, goods, or services now and pay for them in the future.

credit card

A plastic card used to make purchases now and pay for them later.

Credit Report

A detailed report of an individual's credit history

creditor

a person who believes that he will be paid back the money that he loaned

debt

Money owed

extended warranty

additional coverage that you can buy to pay for repairs or replacements needed beyond the original warranty period

finance charge

A fee for borrowing money, added to a monthly credit card bill.

Financial Responsibility

being able to meet your financial goals through planned earning, spending, and saving

fixed interest rate

interest rate that does not change from month to month

Grace Period

A time period during which no finance charges will be added to your account

installment credit

a loan repaid with interest in equal periodic payments

line of credit

the maximum amount of money a creditor will allow a credit user to borrow

Minimum Payment

The smallest required payment that a credit card holder can pay on a monthly bill and still remain in good standing with the lender.

penalty fee

fee for going over the limit/making a late payment

rebate

a cash refund given for the purchase of a product during a specific period

revolving credit

credit that is automatically renewed as debts are paid off.

service credit

the ability to receive services and pay for them later

spending limit

the maximum amount you are willing to pay for an item

store account

a credit account that allows you to charge items or services only at that store or with that merchant

systematic decision making

the process of making choices that reflect goals by considering all the pros and cons along with the costs

variable interest rate

An interest rate on a loan or security that fluctuates over time, because it is based on an underlying benchmark interest rate or index that changes periodically.