Choosing to Borrow Flashcards Preview

GCSE Economics > Choosing to Borrow > Flashcards

Flashcards in Choosing to Borrow Deck (8)
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1
Q

Borrowing

A

getting money from a lender that must be repaid in the future e.g. mortgage

2
Q

Mortgage

A

long term loan often secured on a house, which remains the property of the banks until it is paid off

3
Q

Credit Card

A

purchasing goods or services using borrowed money up to an agreed limit. You must pay off the minimum amount each month (usually 3-5% of the balance) Interest rates are high

4
Q

Store Card

A

cards used to purchase goods or services on credit from a store, up to a pre arranged credit limit. Terms are similar to credit cards. Interest rates are high

5
Q

Personal Loan

A

a loan given for something e.g. extension usually unsecured

6
Q

Hire Purchase

A

renting an item like a piece of furniture from a shop. You only own the furniture once the final payment has been made. Extremely high interest rates – look for Interest free credit deals. E.g. DFS

7
Q

Overdraft

A

borrowing up to an agreed limit on a current account. Daily interest is charged it must be paid back and can be called in at any time by a bank

8
Q

APR

A

Annual Percentage Rate – the interest rate charged on loans to help compare their rates.