chapter 15 vocab Consumer Credit- personal finance
Creditor
An entity that lends money (financial institution, merchant, or individual)
Collateral
Is a form of security to help guarantee that the creditor will be repaid
Bankruptcy
Is 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
Is an arrangement to receive cash, goods, or services now and pay for them in the future
Open-End Credit
Is credit as a loan with a certain limit on the amount of money you can borrow for a variety of goods and services
Closed-End Credit
Is credit as a one-time loan that you will pay back over a specified period of time in payments of equal amounts
Annual Percentage Rate (APR)
Is the cost of credit on a yearly basis, expressed as a percentage
Net Income
Is the income you receive (take-home pay, allowance, gifts, and interest)
Simple Interest
Is the interest computed only on the principal, the amount that you borrow
Line of Credit
Is the maximum amount of money a creditor will allow a credit user to borrow
Minimum Monthly Payment
Is the smallest amount you can pay and remain a borrower in good standing
Finance Charge
Is the total dollar amount you pay to use credit
Consumer Credit
Is the use of credit for personal needs
Title
Or document showing ownership, to the item until all payments have been made
Promptly
Or on time, and manages personal finance carefully
Portion
Or part, of the total cost of an item that is required at the time of purchase
Impostors
Or people who deceive others by assuming different identities, use your name, social security umber, credit card number, or other personal information for their own purposes
Pledged
Or promised, as collateral
Repossess
Or take back, practically all of his new furniture and electronic gadgets
Cosigning
A loan means that you agree to be responsible for the loan payments if the other person fails to make them
Grace Period
A time period during which no fiance charges will be added to your account
Confidental
Or private
Credit Rating
Is a measure of a person's ability and willingness to make credit payments on time
Finance
Give or get money for a used vehicle