4-4 Vocabulary

debit card

A card that acts like an electronic check and is not a credit or charge card; with each purchase, the amount is deducted from a checking account; purchases may not exceed the balance in the account.

charge card

A special type of credit card where the monthly bills for all purchases must be paid in full and there is no interest charged.

credit card

A type of credit card account that has a revolving charge where the entire bill does not have to be paid in full each month.

revolving charge account

A type of credit card where the entire bill does not have to be paid in full each month; there is a minimum monthly payment and finance charge the month following any month were the bill is not paid in full.

mean

Often referred to as average; the sum of all the numbers in a data set divided by the number of elements in the data set.

average daily balance

The average amount owed per day during the billing cycle.

Fair Credit Billing Act

The law that gives protection to a consumer in the case of errors on a monthly credit card statement; consumers are not responsible for a disputed amount or the finance charges that amount accrues, until the error is cleared up.

Fair Debt Collection Practices Act

The law that prohibits the creditor from harassing or using unfair means to collect the amount owed.

Electronic Funds Transfer Act

The law that protects debit card users against unauthorized use of their cards; users are not responsible for purchases made with a lost or stolen card after the card is reported missing.

Truth-in-Lending Act

This law offers protection if a credit card is lost or stolen if a consumer contacts the credit card company immediately after losing a credit card or the card is stolen, the maximum liability is $50.

impulse buying

When a consumer purchases something to which they suddenly were attracted and had no intention of buying.