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