| A | B |
|---|
| credit | the present use of future income that allows consumers to buy good and services purchased now and pay later |
| finance charges | the total amount of money a borrower must pay for the use of credit |
| interest | the price paid to a financial institution for the use of money over a period of time |
| annual percentage rate (APR) | the actual rate of interest charged on a yearly basis |
| revolving charge account | a type of credit account that allows customers a choice of paying for purchases in full each month or spreading payments over a period of time |
| charge account | a type of credit account that allows a customer to buy merchandise, then pay in part or in full by the billing date |
| installment account | a credit account that allows the buyer to apy for expensive items according to a schedule of payments |
| collateral | something of value held by a creditor in case a person is unable to repay a loan, such as a car or house |
| cosigner | a responsible person who signs a loan agreement with a borrower and shares the obligation of repayment |
| equity | the amount remaining once the amount of debt a person owes on a house is subtracted from the amount the house is worth |
| credit rating | a creditor's evaluation of a person's willingness and ability to pay debts |
| credit bureau | an agency that collects and keeps files of financial information on individuals |
| grace period | the number of days allowed to pay for a new credit purchase before interest is charged |
| debt-to-income ratio | the result of dividing total monthly debt by monthly take-home pay, which should not exceed 15 percent |
| bankruptcy | a legal proceeding for the purpose of stating a person's inability to pay his or her debts |
