| A | B |
|---|
| Credit | is an agreement to get money, goods, or services now in exchange for a promise to pay in the future. |
| Creditor | One who lends money or provides credit |
| Debtor | One who borrows money or uses credit. |
| Interest | A fee charged for the use of money. |
| Consumer Credit | When individuals (people) borrow money for personal reasons. |
| Commercial Credit | When businesses borrow money from a financial institution. |
| Credit Rating/credit score | Is a measure of a person's ability and willingness to pay off debts on time. It typically ranges from 300 to 850. |
| Charge Account | Most common type of credit of short-term and medium-term credit |
| Regular Charge account | Requires that you pay for purchases in full within a certain period usually 25 or 30 days. |
| Revolving Charge Account | Allows you to borrow or charge up to a certain amount of money. Interest is charged on the unpaid amount. |
| Budget Charge Accounts | Medium-term loans up to five years. Each payment includes part of the total due on the item plus interest. (Cars, furniture and large home appliances). |
| Consumer finance companies | Specialize in loans to people who might not be able to get credit elsewhere. |
| Pawnshop Loan | To borrow money using collateral. If the loan is not repaid as agreed the institution resales the collateral. |
| Payday Loan | Short-term loan 5-14 day with an extreme high interest rate. |
| Interest rate | The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding. |
