Chapter 25, 26, 27 Intro to Business
Credit Rating
A good _________ tells lender that you are a responsible borrower
usury law
A law restricting the amount that can be charged for credit is called a ______
Equal Credit Opportunity Act
According to the ______there are only three reasons for denying credit: low income, large current debts, and a poor record of making payments
travel and entertainment
American Express and Diners Club are examples of ___________ credit cards, which are used to pay for hotel bills, car rentals, and airline tickets.
credit bureau
An agency that collects information on you and can tell whether you pay your bills on time is called a(n)________
FDCPA
Collection agents must abide by the _______when they collect for your overdue bills
Consolidation Loan
Combines all your debts into one loan with lower payments
Credit Counseler
Consumers who are unable to work out their own credit problems or who repeatedly have problems with credit
installment
Loans repaid in regular payments over a period time, such as student loans, personal loans, and home improvement loans, are types of __________loans
Debtor
One who borrows money or uses credit
Charge accounts
Regular, revolving, and budget are three common types of _______
Credit cards
Single-purpose, multipurpose, and travel and entertainment are three basic types of _______
garnishment of wages
Some credit contracts allow the creditor to take all or part of your paycheck if you miss a payment, which is called_______
variable
With a ______ rate, the interest that banks charge on a loan might be adjucsted for inflation
consolidation laon
________combins all your debts into one loan with lower payments
Consumer Finance Companies
_______specialize in loans to people who might not be able to get credit elsewhere.
Credit counselor
______are people who can help consumers with their credit problems
Bankruptcy
______is a legal process in which you can get rid of your debts, but your creditors can take some of your assets.
Usury Law
a law restricting the amount of interest that can be charged for credit
Collection Agent
a person or business that has the job of collecting overdue bills. This agent may contact consumers that get behind on their credit payments.
Credit Bureau
agency that collects information about you and other credit consumers. It also reports whether you pay your bills on time or have failed to pay debts.
Revolving Account
allows you to borrow or charge up to a certain amount of money, such as $3,000, and pay back a part of the total or the entire balance for each month.
Grace Period
amount of time you get to pay off a debt without having to pay interest charges. One period where credit doesn't cost money
Credit
an agreement to get money, goods, or services now in exchange for a promise to pay in the future.
cash advance
borrow money on a credit card rather than use it to make a purchase
credit refrences
businesses or people you've borrowed from in the past who can testify to your reliability.
Consumer Credit Protection Act
congress created to make comparing credit costs easier. Also known as the Truth In Lending Law.
Garnishment of Wages
credit contracts that allows the creditor to take all or part of your paycheck if you miss a payment
Fixed Rate
interest rate always remains the same
Bankruptcy
legal process in which you're relieved of your debts, but your creditors can take some or all of your assets, such as a car, savings, or business.
Secured Loan
loan that is backed up by collateral
Installment Loans
loans repaid in regular payments over a period of time
Fair Debt Collection Practices Act (FDCPA)
made it illegal for agents to harass consumers
Credit Limit
max amount you can spend or charge on a credit account
Credit Rating
measure of a person's ability and willingness to pay debts on time
Unsecured Loan
not backed by collateral. Interest rates are higher on unsecured loans than on secured loans
Charge Account
one of the most common types of short-term and medium-term credit. Dealers or stores generally offer these.
Truth-in-lending disclosure
provides the costs that a creditor gives to a borrower. Costs expressed in two ways: dollar cost of credit(total finace charge orrr APR
Federal Trade Commission (FTC)
regulates business activities(protects competition), enforces laws on credit
Fair Credit Billing Act
requires creditors to correct billing mistakes brought to their attention. Also, requires that consumers be informed of the steps they need to take to get an error corrected.
cosigner
responsible for a loan if you don't make the payments
Collateral
something of value the bank can take if you don't make the required loan payments ex. cars, houses, boats
Equal Credit Opportunity Act
states that the application sent to apply for a loan or credit card can be judged only on the basis of financial responsibility. No person can be denied credit on base of age, gender, ethnicity, or religion.
collateral, credit rating, character, capacity, captital(debt)
the 5 c's
risk
the amount of ________ a creditor takes in lending money is the most important factor in determining
Interest
the fee creditors charge for using their money
Variable Rate
the rate changes as interest rates in the banking system change
Annual Percentage Rate(APR)
this percentage rate determines the cost of your credit on a yearly basis
Fair Credit Reporting Act
to make sure that the credit file information was accurate
Repossess
to take back the collateral
Finance Charge
total amount it costs you to finance the loan stated in dollars and cents. Includes interest and any other charges, such as an application fee.
Consumer Credit
type of credit used by people for personal reasons
Commercial Credit
Credit used by business
Debtor
If you are the one borrowing the money from a creditor, you are the _______
Fair credit billing act
If you find a mistake on your credit card monthly statement, the ________ requires creditors to correct the billing mistake.
cosign
If you have no credit history or a poor credit rating, you can still get a credit card by having a friend or relative _____it for you.
Creditor
If you loan money or provide credit to others, you are the ______
repossess
If you put up your car as collateral for a bank loan and don't pay the loan back, the bank can ______your car
minimum payments
It can take 30 years to pay off a large credit card bill if you only make the ________each month
Creditor
The one who lends money or provides credit
Consumer credit protection Act
The truth in LEnding law is also knowns as the ______, which requires creditors to inform consumers about the costs and terms of credit.
down payment
The______ is a portion of the total cost that you pay when you purchase a large product, such as a car or large appliance.
principal
The______ is the amount of money you owe on a loan and on which the interest is based.
truth in lending
The______disclosure requires that borrowers be told the total finance charge and the annual APR
grace period
The______is the amount of time you get to pay off a debt without having to pay interest.