Glencoe Business and Personal Finance Chapter 15 – Flashcards
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credit
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an arrangement to receive cash, goods, or services now and pay for them in the future.
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consumer credit
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use of credit for personal needs.
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creditor
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an entity that lends money.
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closed-end credit
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credit as a one-time loan that is paid back over a specified period of time in payments of equal amounts.
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open-end credit
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credit as a loan with a certain limit on the amount of money that can be borrowed for a variety of goods and services.
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line of credit
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maximum amount of money a creditor will allow a credit user to borrow.
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grace period
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time period during which no finance charges will be added to an account.
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finance charge
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total dollar amount paid to use credit.
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net income
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income received from take-home pay, allowance, gifts, and interests.
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annual percentage rate (APR)
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cost of credit on a yearly basis, expressed as a percentage.
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collateral
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a form of security that helps guarantee that the creditor will be repaid.
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simple interest
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interest computed only on the principal.
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minimum monthly payment
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smallest amount that one can pay and remain a borrower in good standing.
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credit rating
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a measure of a person's ability and willingness to make credit payments on time.
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cosigning
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agreeing to take responsibility for loan payments if the other person fails to make then.
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bankruptcy
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a legal process in which some or all of the assets of a debtor are distributed among creditors because the debtor is unable to pay his or her debts.
