| A | B |
|---|
| credit | receipt of money either directly or indirectly to buy goods and sevices in the present with the promise to pay for them in the future |
| principal | amount of money originally borrowed in a loan |
| interest | amont of money the borrower must pay for the use of someone else's money |
| durable goods | manufactured items that have a life span longer than three years |
| commercial bank | bank whose main functions are to accept deposits, lend money, and transfer funds among banks, individuals and businesses |
| savngs and loan association (S&L) | depository institution that accepts deposits and lends money |
| savings bank | depository institution originally set up to serve small savers overlooked by commercial banks |
| credit union | depository institution owned and operated by its members to provide savings accounts and low-interest loans only to its members |
| finance company | a consumer finance company makes loans directly to consumers at high rates of interest |
| finance charge | cost of credit expressed monthly in dollars and cents |
| credit bureau | private business that investigates a person to determne the risk involved in lending money to that person |
| credit rating | rating of the risk involved in lending money to a specific person or business |
| collateral | something of value that a borrower lets the lender claim if a loan is not repaid |
| secured loan | loan that is backed up by collateral |
| unsecured loan | loan guaranteed only by a person's promise to repay it |
| usury law | law restricting the amount of interest that can be charged for credit |
| bankruptcy | the inability to pay debts based on the income received |
