| A | B |
|---|
| grace period | the free period which allows you to avoid a finance charge if you pay in full before the due date |
| creditor | one who lends money or the use of goods and services for payment at a later date |
| credit | paying at a future date for the present use of goods and services or money |
| line of credit | a pre-established amount that can be borrowed on demand |
| collateral | a loan on which the goods purchased with the loan serve as a type of secured loan |
| open-ended credit | credit whereby you can add purchases up to a credit limit |
| closed-end credit | a loan for a specific amount that must be paid in full, including finance charges by a stated due date |
| cash advance | money borrowed against the credit card limit |
| sales finance company | a manufacturer-related company who makes loans throu |
| loan sharks | unlicensed lenders who charge illegal rates |
| deferred billing | a service to customers which allows you to charge now and not be billed for several months |
| service credit | having work performed and paying for it later |
| finance companies | also called small loan companies who charge higher interest rates and take more risk |
| usury laws | maximum interest rates which can be charged |
| pawnbroker | a legal business where loans are made based on the value of merchandise used as collateral |
| collateral | something of value that can be sold to pay a debt |
| creditworthiness | your overall ability to handle credit |
| credit history | your past credit dealings--how you have paid your bills, how many bills you have had and what type, how much total credit you have been given, and how much credit appears to be outstanding now |
| subscriber | a member of the credit bureau who pays fees for the use of the bureau's services in collecting information and issuing reports |
| Truth-in-Lending Law | another name for the Consumer Credit Protection Act of 1968 |
| capacity | your ability to repay a loan or make payments on a debt out of your current income |
| credit bureau | a business that accumulates, stores, and distributes credit information to its members |
| point system | a type of rating used by credit bureaus in determining a person's general credit worthiness |
| excellent | a credit rating earned when you pay your bills before the due date |
| good | a credit rating earned when you pay your bills on the due date or within a short grace period |
| poor | a credit rating which is likely to result in denial of new credit |
| fair | a credit rating given to a person who pays during the grace period, but occasionally takes longer |
| debt collector | a person hired to collect the balance due |
