| A | B |
|---|
| 20/10 Rule | Never borrow more than 20% of your annual net income and never let your monthly debt payments become more then 10% you monthly net income. |
| How-to Avoid Finance Charges | Pay off your balance within grace period. |
| How-to Create Good Credit | 1.Get a student credit card 2. Pay bills early (never late) 3. Pay more than the minimum 4. Don't have too many credit cards open 5. Use only for emergencies. |
| Average Credit Card Balance | $15,799 |
| Average Amount of Credit Cards | 3.5 |
| Three C's Of Credit | Credit, Capacity and Character. |
| Three Credit Bureaus | Equifax, Experian, Trans Union |
| APR | Annual Percentage Rate |
| Charge Card | Requires entire balance to be paid in full each month regardless of how large it is. Invite only. |
| Credit Card | Comes with a revolving line of credit which requires the card holder to make at least a minimum payment every month until the balance is paid off. |
| Debit Card | Used to make electronic withdrawals or deposits from your bank account. |
| Items on Finance Agreement | Parties involved, monthly payment amount, signature, late payment info, Interest rate, Term (how long the loans for), amount of loan. |
| Diffrence between Secured & Unsecured Loan | SL- Loan is which borrower pledges an asset such as a car as collateral for the loan, UL- loan issued and supported only by the borrowers creditworthiness rather than by some collateral |
| Difference between Direct Finance & Indirect Finance | DF- Transaction where there is an intermediary between the lender and borrower. IF- Transaction where there is a transaction through third party institutions like banks or mutal funds. |
| FICO Scores | FICO stands for Fair Isaac Company. It is your credit score. Lenders use this to determine credit risk. The number range is 300-850. The higher the number the better and the lower interest rate you will pay. |
