The Basics of Credit
Credit used by businesses.
commercial credit
Loan given in cash by a credit card company.
cash advance
Your ___ is the total amount of money you earned for a specific time.
gross pay
_______ are sold to finance city, town, or regional projects such as schools, highways, and airports.
municipal bonds
A _____ is a written order directing a bank or other financial institution to pay money on demand to the person or company named on it.
check
A fee charged for the use of money.
interest
Determines the cost of credit on a yearly basis.
annual percentage rate (APR)
A _____ is a plan for using your income in a way that best meets your wants and needs.
budget
A _____ is a certificate issued by a government or company in which it promises to pay back borrowed money at a fixed rate of interest on a specified date (the maturity date).
bond
______ allows electronic transfers of payments directly from the payer’s account to the account of the person being paid.
direct deposit
A loan based on the value of something you own that is left with a pawnbroker as security.
pawnshop
Someone who agrees to be responsible for a debt if the main applicant does not repay it.
cosigner
What you give up when you make one choice instead of another. Also known as a trade-off.
opportunity cost
A ____ is a share of ownership in a corporation.
stock
A _____ is an order for a bank not to cash a particular check.
stop payment
Something of value the bank can take if a borrower does not make the required loan payments.
collateral
When a creditor has the legal right to take back an item.
repossess
Your take-home pay, or ___, is your gross pay minus deductions.
net pay
You can receive a return on stocks in the form of ____, which is a share of profits given to stockholders.
dividends
A ______ is a bank card that immediately takes money from a checking account when it is used.
debit card
A ________ is a point where you cannot charge any more to a credit card.
credit limit
The highest FICO Score that you can possibly have is _____.
850
A ____ occurs when more money is spent than is earned or received.
deficit
A ______ is a profit made from the sale of a financial asset such as stock or a bond.
capital gain
You cannot cash or deposit a check without ___ it.
endorsing