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.