| A | B |
|---|
| credit | promise to repay an obligation |
| lender | provides value in the form of cash, merchandise or some other item of value |
| borrower | makes a commitment to pay what he/she owes according to a pre-agreed schedule |
| three "C's" of credit | credit, capacity, and character |
| Fafir Credit Reporting Agency | to protect consumers by making sure Credit Reporting Agencies use reasonable procedures |
| what should you do once a year | check your credit history to make sure that it is accurate |
| Credit Reporting Agencies | Equifax, Experian, TransUnion |
| prepayment | you have the right to pay off the unpaid balance of a loan at any time |
| default | if a borrower fails to make any payment when due |
| late payments | a fee charged if you do not repay a loan by the due date |
| debit card | is used as an alternative to cash;funds are withdrawn from checking/savings acct. |
| charge card | balance must be paid in full each month |
| credit card | retail transaction settlement at the cost of having interest charged |
| APR | annual percentage rate |
| average daily balance | method of computing the balance for purchases |
| grace period | 25 days on new purchases without receiving a finance charge |
| over the credit limit fee | if you charge more than your credit limit, you pay a fee |
| 20/10 rule | never borrow more than 20% of your annual net income or let your debt by more than 10% of monthly net income |
| Ways to Avoid Finance Charges | don't go over limit, pay balance within grace period & on time |
| Credit Reporting Agencies must: | investigate inaccuracies, usually within 30 days |
