Credit

Credit Card

A card that is issued by a financial institution or business to an entity that allows said entity to purchase goods and services through means of credit rather than cash. It serves as a small, instant-loan and provides extreme convenience to the user. This small plastic device can help build up a positive credit score over time, if used properly i.e. purchases are made on time. When used improperly, however, the small plastic card can completely decimate one's credit score, as it relates to Payment History, Length of Credit history, and Accounts in Use, the three factors that compose 60% of all factors that affect the credit score.

Credit Report

A detailed report that displays information on a person's creditworthiness, including identifying information, credit cards, late payments, bankruptcies, and savings balances. This is examined by loaners.

[Late Payment] [Late Payment Fees]

A fee (or Fees) charged when a cardholder does not make the minimum monthly payment by the due date

Cash Advance Transaction Fees or Cash Advance

A fee charged for a cash withdrawals from a credit card amount

Annual Fee

A fee charged once per year for credit card ownership

Retail Credit Cards

Account which allows for a customer to make credit card purchases at a particular retailers. Retailers can work with banks and offer bank credit cards with their logos on it (i.e. Old Navy Visa credit card)

Travel And Entertainment Card

Accounts similar to Bank Credit Card, except the entire balance must be repaid in 30 days

Affinity Cards

Accounts through financial institutions with the logo of a sponsoring organization, The financial institution [typically] donates a small percentage of the charge to the organization.

Charges Payments Credits

All of the transactions which occur with the use of a credit card. C____s add to the account balance, while p____ts and cr___ subtract from the balance

Grace Period (for Purchases)

Amount of time, in days, allowed to the cardholder between the day the items are charged on the credit card and the day finance charges begin to apply

Harmed

By paying a bill one day late, your credit score will be MOST LIKELY harmed/not affected?

no grace period

Fill in the blank: The Average Daily Balance Including New Purchases with _________ involves the application of interest to new purchases as they are made, regardless of the previous month's balance

Including New Purchases

Fill in the blank: The Average Daily Balance _________ with a grace period involves the application of interest to new purchases when they are made, assuming the balance is not 0. If the balance IS 0, then a grace period is allowerd before interest is charged

Excluding New Purchases

Fill in the blank: The Average Daily Balance __________ involves the payment of interest on the previous balance, not on purchases made since the last payment

Two-Cycle

Fill in the blank: The ___________ Average Daily Balance Including Purchases, which is a method where the average daily balance is determined on 60 days rather than 30 days (30 days = 1 cycle), so finance charges are doubled. Zero-Balance must be held for TWO months to avoid charges. This should be avoided

Bank Credit Card

Flexible account accepted for purchases anywhere made available by a financial institution with a service provider. Transactions occur through an electronic network. Involves credit unions, savings and loan associations, and/or commercial banks through card providers including but not limited to Visa, MasterCard, and American Express.

Prestige Cards

High status accounts which require higher credit qualifications, but receive special benefits. The "special" card

Experian or Equifax or Equifax Credit Information Services or Transunion or Trans Union

Name one Credit Reporting Agency.

Character Capital Capacity Conditions

Name the four Cs of Credit (in any order without commas)

New Balance

The (new) total amount owed including the previous balance, any charges or payments made to the account, and finance charges. [Not to be confused with a certain shoe brand]

Finance Charge

The Charges assessed to the account for the credit card use throughout the month

Federal Truth in Lending Act

The United States Federal Act that requires a lender to disclose information about the costs of credit to the borrower. In the case of a credit card, the Act prompts credit institutions to provide a Schumer Box

Schumer Box

The box of information that lists the costs of credit cards (i.e. APR, Annual Fees, et cetera) provided by credit institutions as required by the Federal Truth in Lending Act

Annual Percentage Rate (APR)

The interest rate charged to the cardholder on the amount borrowed in terms of per dollar per year

Closing Date

The last day transactions are reported on the statement. After this day, transactions go onto the next statement.

FICO Score

The main part of the credit report that practically determines one's credit score(<---not the answer). Is used to determine one's credit risk.

Credit Line

The maximum amount of charges allowed to the account

Minimum Finance Charge

The minimum amount to be charged for use of a credit card

Minimum Payment Due

The minimum amount to be paid on a credit card.

Past Due Amount

The required amount not paid before the due date

Due Date

The specified day by which the company requires a payment to be made. [The same name applies to the day when a project or assignment is due]

Fair Isaac Company/Corporation

What does FICO stand for?