Personal finance chapter 6: credit

Debt Collectors

businesses that collect debts for creditors.

Principal

the amount that you borrow

Indebtedness

the condition of being deeply in debt.

Net income

the income you receive after you pay everything else off (your take home pay, allowance, gifts, interest on bank accounts, and so on)

Line of credit

the maximum amount of money the creditor has made available to you

Interest

the periodic charge for using credit is...

chapter 7 bankruptcy relieves an individual from debts arising from...

credit card charges

Annual percentage rate (APR)

shows how much credit costs you on a yearly basis, expressed as a percentage

Simple interest

: the interest computed only on the principal

bankruptcy

the legal process in which some or all of the debtor's assets are distributed among creditors because the debtor cannot pay his or her debts is called..

Being tempted to overspend

the greatest disadvantage of using credit cards is...

Minimum monthly payment

the smallest amount you can pay and remain a borrower in good standing (can cost a lot of money)

fair credit billing act

which law gives a borrower the right to stop payment?

capacity

which of the give c's of credit does your income affect?

Open end credit

you borrow money for a variety of goods and services

Closed End Credit

you receive a one time loan that you will pay back over a specified period of time and in payments of equal amounts

Collateral

a form of security to help guarantee that the creditor will be repaid

Bankruptcy

a legal process in which some or all of the assets of a debtor are distributed among the creditors because the debtor is unable to pay his or her debts.

Credit rating

a measure of a person's ability and willingness to make credit payments on time

Interest

a periodic charge in exchange for the use of credit

Debtor

a person or institution that owes a sum of money

Grace Period

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

1. Credit

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

Creditor

an entity (a bank, finance company, credit union, business, or individual) to which money is owed

find the least expensive loan from...

family members

Co-signing

means that you agree to be responsible for loan payments if the other party fails to make them.

discriminates against you

under the equal credit opportunity act you may sue a creditor if the creditor

Finance Charge

the total dollar amount you pay to use credit

Consumer Credit

the use of credit for personal needs

paying more in interest

the usual trade off of choosing small payments is