Credit Foundations
Money received in exchange for a promise to pay later.
What is credit?
Extra money in the form of fees and interest paid by the consumer.
What are finance charges?
The highest amount of money that can be charged on an account.
What is a credit limit?
A three-digit number showing if a consumer is a credit risk.
What is a credit score?
This monthly document shows payments, charges, and fees.
What is a credit card statement?
A promise to pay for an item at a later date.
What does it mean to buy on credit?
The annual interest rate charged if you carry a balance.
What is Annual Percentage Rate / APR?
The fee for paying your credit card bill after the due date.
What is a late fee?
The term for how trusted you are to repay borrowed money.
What is creditworthiness?
This section of the statement shows totals for the entire calendar year.
What are year-to-date totals?
A set amount of money that you are allowed to borrow.
What is a line of credit?
This is NOT a benefit of having a credit card.
What is getting charged interest?
The fee for going over your maximum credit limit.
What is an over-the-limit fee?
An organization that maintains files on your credit history.
What is a credit agency?
The statement shows how long it takes to pay off the card if you only pay this amount.
What is the minimum payment?
This represents a specific "line of credit" in your pocket.
What is a credit card?
Doing this monthly will save you the most money in the long run.
What is paying the entire amount owed each month?
When look for a card, you should ensure it has these two "low" things.
What are low interest rates and low fees?
A report that describes your credit history and responsibilities.
What is a credit report?
Safe, convenient, and offering rewards or bonuses.
What are benefits of a credit card?
Credit that is renewed as debt is paid off.
What is revolving credit?
The fee paid every year just for the privilege of using a card.
What is an annual fee?
When you have a credit card, you should only buy what you can do this with.
What is only buy what you can afford?
Better job, better loan terms, lower interest rate
What are benefits of a good credit score?
Name three specific things found on a credit card statement.
What are payments, new charges, fees, interest, or YTD totals?