Ch 16,17,18,19 Flashcards Preview

Consumer Ed > Ch 16,17,18,19 > Flashcards

Flashcards in Ch 16,17,18,19 Deck (69):
1

APR

cost of credit expressed as yearly percentage

2

capital

value of property you possess

3

closed end credit

loan for specific amount to be repaid in full by due date

4

collateral

property pledged to assure repayment of loan

5

credit

use of someones elses momey

6

deferred billing

service available to charge customer whereby purchases are not billed to customer unril later

7

finance charge

total dollar amount of all interest fres you pay for credit

8

line of credit

preestablished amount can be borrowed on demand with no collateral

9

loan sharks

unlicensed lender eho charge illegally high interest

10

open ended credit

borrower can use credit up to a limit (visa/kohls)

11

pawnbroker

legal business makes high interest loans on value of personal possessions as collateral

12

service credit

providing service to pay later (utilites)

13

usury law

law set max interest rate to be chaeges

14

down payment

amount paid at purchase to bring down amount owes

15

fixed rate loans

interest rate dont chage over life of loan

16

garnishment

legal process allows part of your paycheck withheld to pay debts

17

prime rate

imterest rat that banks offer to best customers

18

prinicpal loan

total amount borrowed

19

rebate

get back portion of what you spent in credit purchases in a year

20

simple interes

interest computed only kn amount borrowes without compounding

21

unused credit

remaining credit available to you on current accounts

22

C's of credit

character
capacity
capital
condition
collateral

23

credit bureau

business gathers, stores, and sells credit info to other busniesses

24

credit history

complete record of your borrowing

25

credot rating

measure of credit worthiness based on analysis of credit and financial history

26

credit report

written statement of consumers credit history

27

debt collector

person/company hired by creditor to collect overdue balance on the account

28

20/10 rule

plan to limit use of credit to no more than 20% of yearly take home pay with payments of no more than 10% of monthly take home pay

29

bankruptcy

legal process that relieves debtor of responsiblity of laying debts or protect them while repaying

30

chapter 7 bankruptcy

liquidiation form wipes most debt in exchange for assets
straight

31

chapter 11 bankruptcy

reorganization form busniess allows them to continue operating under court supervision as they repay debts

32

chapter 13 bankruptcy

reorganization form allows to keep propert and use income to pay portion of the debts in 3-5 years
payements

33

debtor

person ebk buys money from others

34

discharged debts

devts erased by court during bankrupcy proceedings

35

exempt property

assets considered necessary for survival (ch7)

36

involuntary bankruptcy

creditor file petition woth court to declare you bankrupt

37

reaffirmstion of debt

agreement to pay debts if friend/family cosigned loan amd you dont to burden them with debts

38

unsecured debts

loan not backed by pledged assets

39

voluntary bankruptcy

file petition woth federal court asking to be declared bankrupt (common)

40

how is open ended credit different from installment credit

open ended- make as many payments as u want
installment- set number of payments

41

why does the law require lenders to include all loan costs in APR what are those loan costs

compare different lenders
benefits
monthly minimum

42

how are consumer finance companies different from sales finance comapnies

loans to consumers buying their items
loans authorized by represntative

43

what does credit bureau do to earn money
who pays their services

sells credit info and credit report
big businesses

44

how do credit reports benefit lenders
how do they benefit borrowers

whos not/whos at risk
if they can pay debts

45

what typed of public record becomes a prt of credit report

bankruptcy
divcorce
taxes
marriage
birth
job

46

why do creditors care about how long you worked at present job and how many jobs youve had

see if you can pay debt
consistant payments

47

personal factors that creditors consider

econmic status

48

what types od discrimination are unlawful in granting or denying credit

sex
religion
ethnicity
age
relationship

49

what federal law protects consumers from discriminaion

equal credit opportunity act

50

do you have a right to see your own credit file

yes

51

what is purpose of fair credit reporting act

cant be denied on inaccurate info

52

what should you do if there is any error in statement from creditor

contact them immediately

53

what is your liability and responsiblity if your credit card is lost or stolen

limit transactions
cancel

54

what can you do to protect credit card from unauthorized use

report misued

55

what can you do to help protect credit cards and personal info when makin online transactions

know and trust site
look for secure lock on browser
look for privacy policy

56

why is it important to make more than minimum payment on credit card debt

know you have money and pay debt back faster

57

what sources of help in solvig credit problems are available

credit counseling

58

where can you find out about nonprofit credit counseing services in area

credit counselor
govt sponsored
yellow pges
internet

59

what is debt consolidation loan and what is required to qualify

loan to pay debt
have collateral

60

often devt consolidation loans are considered bandage why

still have to pay debt

61

what are two ways devtor may be declared bankrupt

involuntary and voluntary

62

umder chapter 7 bakruptcy what lust debter give up

assets

63

what type of family obligations are not discharged by bankruptcy

child support
income tax
student loans

64

how long does bankruptcy stay on record

forever

65

how does ch 13 differ from ch 7

7- immediate wioes debt
13- pay in 3-5years

66

why might debtor chose to reaffirm debt after bankruptcy

dont want to burden friend or family with debt

67

list four commin reasons for bakruotcy

jobless
emotional spending
fail budget and plan
injury/illness

68

formula for apr

2xnxf/P(N+1)

69

formula for simper interest

PxRxT