credit card test

credit bureau

The credit bureau is an agency that researches and collects individual credit information and sells it for a fee to creditors so they can make a decision on granting loans.

cash advance

a service provided by most credit card and charge card issuers. The service allows cardholders to withdraw cash, either through an ATM or over the counter at a bank or other financial agency, up to a certain limit. For a credit card, this will be the credit limit (or some percentage of it).

credit freeze

also known as a Security Freeze, is a way for you to have maximum control over access to your credit. Placing a freeze on your credit report will prevent lenders and others from accessing your TransUnion credit report in response to a new credit application.

line of credit

an amount of credit extended to a borrower.

calculating daily and monthly interest based on APR

apr plus money you don't pay back

finance charge

finance charge is any fee representing the cost of credit, or the cost of borrowing. It is interest accrued on, and fees charged for, some forms of credit. It includes not only interest but other charges as well, such as financial transaction fees. ... Interest is a synonym for finance charge.

how is simple interest calculated

simple interest formula: A = P(1 + rt) where P is the Principal amount of money to be invested at an Interest Rate R% per period for t Number of Time Periods. Where r is in decimal form; r=R/100; r and t are in the same units of time.

wants

something that you want to have. Don't spend all your money on these

needs

something you needs to have

Discover

the Discover Card charged no annual fee and offered a higher-than-normal credit limit, features that were disruptive to the existing credit card industry. A subsequent innovation was "cash back bonuses" on purchases.

authorized user

basically means you have someone else's card in your name. You can make purchases with it, but you're not the primary owner of the card. And you're right: signing on as an authorized user can help someone build or rebuild credit.

collateral

can help a borrower secure loans. It gives the lender the assurance that if the borrower defaults on the loan, the lender can repossess the collateral.

truth and lending act

designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed. APR, term of loan-grace period, total costs to the borrower, interest rates, fees/penalties, opportunity to close account, standard use

people who can request credit report

employers, landlords, loan officers

credit card check

A convenience check, also called a credit card check, is linked to a consumer's credit card account and can be used to make purchases or take cash advances with the credit card. ... To make a purchase, simply write a check for the purchase amount to a merchant and sign the check.

what is reported in a schumer box

Annual percentage rate (APR) for purchases: the interest rate you pay on financed purchases, which may include introductory and long-term rates Other APRs: interest rates for balance transfers, cash advances, default, etc. Variable rate information (if applicable): how your interest rate can (and will) change. Grace period: the period of time after your billing period ends when interest charges are not yet applied to your debts Finance calculation method: how interest is calculated, if the credit card balance is not paid in full each month Finance charges: the minimum amount charged if a balance is carried over month to month. Annual fee — the once-a-year charge for using the card Other fees — foreign transaction fees, balance transfers, cash advances, late payments, etc.Annual percentage rate (APR) for purchases: the interest rate you pay on financed purchases, which may include introductory and long-term rates Other APRs: interest rates for balance transfers, cash advances, default, etc. Variable rate information (if applicable): how your interest rate can (and will) change. Grace period: the period of time after your billing period ends when interest charges are not yet applied to your debts Finance calculation method: how interest is calculated, if the credit card balance is not paid in full each month Finance charges: the minimum amount charged if a balance is carried over month to month. Annual fee — the once-a-year charge for using the card Other fees — foreign transaction fees, balance transfers, cash advances, late payments, etc.

capacity

Capacity measures a borrower's ability to repay a loan by comparing income against recurring debts and assessing the borrower's debt-to-income (DTI) ratio.

capital

Lenders also consider any capital the borrower puts toward a potential investment. A large contribution by the borrower decreases the chance of default.

joint account

a bank account held by more than one person, each individual having the right to deposit and withdraw funds.

debit card

a card issued by a bank allowing the holder to transfer money electronically to another bank account when making a purchase.

APR

is the amount of interest on your total loan amount that you'll pay annually (averaged over the full term of the loan). A lower APR translates to lower monthly payments.

evaluating credit cards

1. Consider the source of the offer 2.Determine the type of card you want 3.Know the applicable fees (and how to avoid them) 4.Calculate the value of the annual fee 5.Know the cost of financing purchases on your credit card 6.Understand the rewards program, if applicable 7.Review the additional benefits and perks 8.Consider the retailer acceptance of the card 9.Know your credit score and any other application qualifiers 10.Look through the fine print

five factors of a fico score

35% paying history, 30% amount owed, 15% length of credit history, 10% new credit, 10% credit mix

credit card act 2009

45 days notice to increase rates, you have 21 to pay your bill when it is mailed. Can't open a card until 21 unless they have a steady flow of income.

fico score ranges

800 +: Indicates an exceptional FICO Score and is well above the average credit score. Consumers in this range may experience an easy approval process when applying for new credit. Approximately 1% of consumers with a credit score of 800+ are likely to become seriously delinquent in the future. 740 to 799: Indicates a very good FICO Score and is above the average credit score. Consumers in this range may qualify for better interest rates from lenders. Approximately 2% of consumers with a credit score between 740 to 799 are likely to become seriously delinquent in the future. 670 to 739: Indicates a good FICO Score and is in the median credit score range. Consumers in this range are considered an "acceptable" borrower. Approximately 8% of consumers with a credit score between 670 to 739 are likely to become seriously delinquent in the future. 580 to 669: Indicates a fair FICO Score and is below the average credit score. Consumers in this range are considered subprime borrowers and getting credit may be difficult with interest rates that are likely to be much higher. Approximately 28% of consumers with a credit score between 580 to 669 are likely to become seriously delinquent in the future. 579 and lower: Indicates a poor FICO Score and is considered to be poor credit. Consumers may be rejected for credit. Credit card applicants in this range may require a fee or a deposit. Utilities may also require a deposit. A credit score this low could be a result from bankruptcy or other major credit problems. Approximately 61% of consumers with a credit score under 579 are likely to become seriously delinquent in the future.

credit card

A credit card allows you to borrow money from your bank to make your purchases, whether you're buying a burger or a round-trip ticket to France. As long as you pay back the money you borrowed within the "grace period" of 25-30 days, you don't have to pay extra. If you don't pay it back in that time period, you'll have to pay interest — a percentage of the money you owe the bank — on top of what you borrowed.

what is reported in a credit card statement

A credit card statement is a summary of how you've used your credit card for a billing period. Summary of account activity, payment information, late payment period, minimum payment warning, notice of changes to your interest rate, important changes in your account terms, transactions, fees, interest charged, interest charge calculations

American Express

A credit, charge or prepaid card branded by American Express Company, a major payment card and travel services company. American Express cards, also called Amex cards, are available to individuals, small businesses and corporate consumers in the United States and around the world. An American Express credit card for individual consumers with excellent credit might offer rewards points, flexible repayment terms and a low interest rate.

Master

A credit, charge, debit or prepaid card branded by MasterCard Incorporated, a major technology and global payments company. MasterCard cards are available to individual consumers and to small, mid-size and large businesses with a variety of needs and credit histories. A wide variety of financial institutions, including Citibank, Capital One, Barclays and First Premier Bank, issue MasterCards to consumer. MasterCard itself does not issue cards, it only processes the card transactions. Each issuer decides what terms and rewards to offer consumers for each card. What these cards all have in common, regardless of the issuing financial institution or card type, is that consumers can use them at any business that accepts MasterCard cards.

Visa

A credit, debit or prepaid card branded by Visa Inc., a major payments technology company. Visa cards are available to individual and business consumers with excellent, good, poor or no credit. Each card has different terms that reflect the consumer's credit worthiness. Each issuer sets its own terms and conditions for the Visa cards it offers and decides which consumers to offer Visa cards to.

explain how to establish a credit score

Make 100% of your payments on time, not only with credit accounts but also with other accounts, such as utility bills. Bills that go unpaid may be sold to a collection agency, which will seriously hurt your credit. Keep your credit utilization low — utilization is your balance when compared to your limit. We recommend paying in full each month, but if do you carry a balance don't let it exceed 30% of your credit limit. Avoid opening too many new accounts at once; new accounts lower your average account age, which makes up part of your credit score. Keep accounts open for as long as possible. Unless one of your unused cards has an annual fee, you should keep them all open and active for the sake of your length of payment history and credit utilization. Check each of your credit reports annually for errors and discrepancies.

dangers of min payments

Paying down your debt will take much longer. You'll rack up bigger interest charges. Your credit score could take a hit.

character

Sometimes called credit history, the first C refers to a borrower's reputation or track record for repaying debts. This information appears on the borrower's credit reports.

condition

The conditions of the loan, such as its interest rate and amount of principal, influence the lender's desire to finance the borrower. Conditions refer to how a borrower intends to use the money.

fee

a payment made to a professional person or to a professional or public body in exchange for advice or services.

fair reporting act

is U.S. Federal Government legislation enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. It was intended to protect consumers from the willful and/or negligent inclusion of inaccurate information in their credit reports. To that end, the FCRA regulates the collection, dissemination, and use of consumer information, including consumer credit information. 60 days to dispute a charge. you are liable up to 50 dollars

cosign account

is a guarantor. With his credit score, he lends credibility to the account holder and helps to gain credit or account status. A cosigner may also be held responsible for any debts or other balances owed by the primary account holder.

secure loan

is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan.

unsecured loan

is a loan that is issued and supported only by the borrower's creditworthiness, rather than by any type of collateral. An unsecured loan is one that is obtained without the use of property as collateral for the loan, and it is also called a signature loan or a personal loan.

credit history

is a record of a borrower's responsible repayment of debts. A credit report is a record of the borrower's credit history from a number of sources, including banks, credit card companies, collection agencies, and governments.

grace period

is the provision in most loan and insurance contracts that allows payment to be received for a certain period of time after the actual due date. During this period, no late fees are charged, and the late payment does not result in default or cancellation of the loan.

balance transfer

is where part or all of a debit balance (or debt) you owe to another lender is transferred from one card to another, usually to save money on interest repayments. A balance transfer credit card can be a good way to slow down and take stock of your debt.

fico score

measure of consumer credit risk, has become a fixture of consumer lending in the United States. In 2013, lenders purchased more than 10 billion FICO scores and about 30 million American consumers accessed their scores themselves. 1 free report a year

Credit limit

refers to the maximum amount of credit a financial institution extends to a client through a line of credit as well as the maximum amount a credit card company allows a borrower to spend on a single card.