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Credit Review

Credit Review. Spring 2014. Annual Percentage Rate. Cost of credit expressed as a yearly percentage. Credit Limit. The maximum amount of charges allowed to an account. Interest. The charge for borrowing money. Credit.

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Credit Review

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  1. Credit Review Spring 2014

  2. Annual Percentage Rate • Cost of credit expressed as a yearly percentage

  3. Credit Limit • The maximum amount of charges allowed to an account.

  4. Interest • The charge for borrowing money

  5. Credit • Receipt of money to buy good or services in the present with the promise to pay for them in the future.

  6. Revolving Credit • Pre-approved credit up to a certain limit that you can use at any time.

  7. Secured Loan • This backed up by collateral and the collateral can be the item you are purchasing

  8. Cosigner • A person besides the borrower who signs a credit agreement and is legally obligated to repay the loan if the borrow does not make payments.

  9. Character • Having good or bad payment history

  10. Installment Credit • Borrowing a set amount with equal monthly payments

  11. Capacity to Pay • Stable job history and having the ability to pay for the item you purchases

  12. Condition • Adverse changes to the industry you work in, adverse property changes, pending lawsuits are all example of ???

  13. Annual Fee • Fee charge once a year for credit card ownership

  14. Truth in Lending Act • This states: the cardholder is only liable up to $50 if the card is stolen; if the number is stolen (but not the card) the cardholder has $0 liability and states the cardholder must submit a letter within 60 days of fraud.

  15. Collateral • Having something of value that can be sold or used to help pay off a debt i.e. house, art, jewelry

  16. Credit Score • A number that summarizes an individuals’ credit history

  17. Due Date • Date the payment is due

  18. Credit Report • A record of a consumer’s credit history

  19. Capital • Savings, investments, IRA, 401 K plan, are examples of things which are liquid and can be accessed to pay off debt.

  20. Bankruptcy • Not having enough income to pay for all of your expenses and being in debt to the point of never being able to pay. • Remains on your credit for 10 years

  21. Finance Charge • Charges to a credit card when you do not pay the full amount due on your bill.

  22. Minimum Payment • Smallest amount that can be paid on a credit payment

  23. Credit Reporting Agency • The best place for a consumer to acquire a credit report and this can be done 1 time per year per agency.

  24. Credit Worthiness • Checking someone’s credit history helps a lender determine their ____________.

  25. Late Payment Fee • Fee charged when the payment made is not made by the due date

  26. Additional things to look at… • Advantages and Disadvantages of Credit • Review vocabulary • Credit Card Safety Tips • Debit and Credit Cards (Differences & Similarities) • Credit Scores (effect to you – and how you affect it)

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