Credit Cards
What is a credit card used for?
Making purchases by borrowing money from a bank or credit card company.
What are personal loans?
General loan in which the money can be used for any personal cause.
What is interest?
What is Credit?
Borrowed Money from the bank, which you have to pay back.
Why is it important to pay your bills on time?
It helps build a good credit score and avoid late fees or penalties
How old do you have to be to get a credit card in your own name?
18+
whats a subsidized loan?
A loan you pay with interest while being a student.
What sum of money is interest payed off of?
Whats a Credit Contract?
A legal agreement between a borrower and a lender outlining terms of credit.
What are the benefits of being a co signer and what are the disadvantageous of being one?
Benefits: Your credit score can increase
Disadvantages : If the amount is not payed then you will be held responsible for paying the money.
What does APR stand for?
Annual Percentage Rate
What is a secured loan?
Secured loans are backed by collateral, which is an asset that the lender can take if the borrower fails to repay the loan.
How can your credit score affect the interest rate you receive on a loan?
A higher credit score usually qualifies you for a lower interest rate, while a lower score may result in a higher rate.
Whats a co signer?
A person who agrees to pay back a loan if the main borrower can't.
Who is more likely to get approved for a credit card?
Bob: Middle-aged man with a low credit score, and poor credit history, making above the average salary.
Ross: 18-year-old, no credit history and working part-time.
Ross
850
What is an unsubsidized loan?
A loan in which you are responsible to pay for interest from the very beginning, even while being in school, grace periods and throughout repayment.
What is a loan origination fee?
A fee charged by a lender for processing a new loan.
What is interest rate?
The percentage of a loan amount that a borrower pays a lender for using their money.
The percentage return an investor earns on their savings or investments.
What's one strategy to avoid paying interest on your credit card?
Pay your full balance before the due date each month.
What is penalty APR and when might it apply to your credit card?
A higher interest rate charged when you miss payments or violate card terms.
What is a home equity loan?
A home equity loan is a type of loan where you borrow money against the value of your home, using the equity as collateral.
How does compound interest differ from simple interest?
Compound interest is calculated on the original amount and also on any interest that has been added, while simple interest only calculated on the principal.
Whats a down payment?
A down payment is the upfront cash portion of a purchase price, often used for large transactions like buying a car or a house, with the remaining balance financed over time.
How does a credit utilization ratio impact your credit score, and what is a good percentage to stay under.
It shows how much credit you're using compared to your limit; staying under 30% is recommended to keep a good score.