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