Installment Credit (closed-end credit) - ANSWER Credit arrangement in
which the borrower must repay the amount owed plus interest in a
specific number of equal payments.
Open-ended (revolving) credit - ANSWER Arrangement in which credit
is extended in advance of any transaction so that borrowers do not need
to reapply each time they need to use credit.
Credit Limit - ANSWER Maximum outstanding debt that a lender will
allow on an open-ended credit account
Minimum Payment - ANSWER Payment that must be made to a credit
account each month to cover interest and a portion of the amount owed.
Principal - ANSWER Total amount owed on a credit account not
including interest.
Bank Credit Card Account - ANSWER Open-ended credit account with
a financial institution that allows the holder to make purchases almost
anywhere
Annual Percentage Rate - ANSWER The cost of credit on a yearly
basis stated as a percentage rate.
Consumer Credit - ANSWER Non business debt used by consumers
for expenditures other than home mortgages.
Two Types of Consumer Credit - ANSWER Installment and
NonInstallment
Noninstallment credit - ANSWER Single payment, open-ended credit
and service credit.
, Credit (Charge) Card - ANSWER Plastic card identifying the holder as
a participant in the charge account plan of a lender, retailer or financial
institution.
Cash Advances - ANSWER Cash loan from a credit card account
Personal line of credit - ANSWER Form of open ended credit that
allows the borrower access to a prearranged revolving line of credit
provided by the lender. Includes a credit limit and flexible repayment
schedule.
Credit Service - ANSWER Granted to consumers by public utilities,
physicians, dentists and other service providers that do not require full
payment when services are rendered.
Home-equity line of credit - ANSWER Personal line of credit for which
your home equity is the collateral.
Balance Transfer - ANSWER Full or partial on the balance of one credit
card using a cash advance from another.
Retail Credit Cards - ANSWER Allow customers to make purchases on
credit at any of the outlets of a particular retailer.
Annual Fees - ANSWER Charges levied against cardholders for the
privilege of having an open account but that are not included in the
advertised APR
Transaction Fee - ANSWER Charge levied against cardholders per use
of the card that is not included in the APR advertised
Introductory Rate - ANSWER A temporarily low initial interest rate to
entice borrowers to apply for a credit card.
Default Rate - ANSWER A high APR that is assessed whenever a
borrower fails to uphold certain rules of the account such as making on-
time payments or staying within the specified credit limit.
which the borrower must repay the amount owed plus interest in a
specific number of equal payments.
Open-ended (revolving) credit - ANSWER Arrangement in which credit
is extended in advance of any transaction so that borrowers do not need
to reapply each time they need to use credit.
Credit Limit - ANSWER Maximum outstanding debt that a lender will
allow on an open-ended credit account
Minimum Payment - ANSWER Payment that must be made to a credit
account each month to cover interest and a portion of the amount owed.
Principal - ANSWER Total amount owed on a credit account not
including interest.
Bank Credit Card Account - ANSWER Open-ended credit account with
a financial institution that allows the holder to make purchases almost
anywhere
Annual Percentage Rate - ANSWER The cost of credit on a yearly
basis stated as a percentage rate.
Consumer Credit - ANSWER Non business debt used by consumers
for expenditures other than home mortgages.
Two Types of Consumer Credit - ANSWER Installment and
NonInstallment
Noninstallment credit - ANSWER Single payment, open-ended credit
and service credit.
, Credit (Charge) Card - ANSWER Plastic card identifying the holder as
a participant in the charge account plan of a lender, retailer or financial
institution.
Cash Advances - ANSWER Cash loan from a credit card account
Personal line of credit - ANSWER Form of open ended credit that
allows the borrower access to a prearranged revolving line of credit
provided by the lender. Includes a credit limit and flexible repayment
schedule.
Credit Service - ANSWER Granted to consumers by public utilities,
physicians, dentists and other service providers that do not require full
payment when services are rendered.
Home-equity line of credit - ANSWER Personal line of credit for which
your home equity is the collateral.
Balance Transfer - ANSWER Full or partial on the balance of one credit
card using a cash advance from another.
Retail Credit Cards - ANSWER Allow customers to make purchases on
credit at any of the outlets of a particular retailer.
Annual Fees - ANSWER Charges levied against cardholders for the
privilege of having an open account but that are not included in the
advertised APR
Transaction Fee - ANSWER Charge levied against cardholders per use
of the card that is not included in the APR advertised
Introductory Rate - ANSWER A temporarily low initial interest rate to
entice borrowers to apply for a credit card.
Default Rate - ANSWER A high APR that is assessed whenever a
borrower fails to uphold certain rules of the account such as making on-
time payments or staying within the specified credit limit.
