| A | B |
|---|
| credit | an arrangement to receive cash, goods or services now & pay later |
| consumer credit | the use of credit for personal needs |
| creditor | an entity that lends money |
| closed-end credit | a one-time loan where you make payments of equal amounts |
| open-end credit | credit as a loan with a certain limit on the amount you can borrow |
| line of credit | the maximum amount of money a creditor will allow a credit user to borrow |
| grace period | a time period during which no finance charges will be added to your account |
| finance charge | the total dollar amount you pay to use credit |
| net income | the income you receive after taxes |
| annual percentage rate | the cost of credit on a yearly basis |
| collateral | a form of security to help guarantee that the creditor will be repaid |
| simple interest | the interest computed only on the principal, the amount that you borrow |
| minimum monthly payment | the smallest amount you can pay and remain a borrower in good standing |
| credit rating | a measure of a person's ability and willingness to make credit payments on time |
| cosigning | agreeing to be responsible for another person's loan payments if that person fails to make them |
| bankruptcy | a legal process where assets of a debtor are distributed among the creditors |
| debit card | a cash card that allows you to withdraw money or pay for purchases from your savings or checking account |
| credit rating | a measure of a person's ability and willingness to make credit payments on time |
