Credit Basics
This is the amount of money you borrow from a lender.
What is the principal?
This term refers to the maximum amount of money that can be charged to a credit card.
What is a credit limit?
Having a low one of these will likely increase your monthly auto loan payment.
What is a credit score?
Paying a percentage of a car's price upfront to reduce the amount you need to borrow is known as this.
What is a down payment?
This is the specific term for a loan taken out to purchase a home.
What is a mortgage?
This represents how long you have to pay borrowed money back, with interest, to the lender.
What is the term?
Unlike debit cards, these cards charge interest on carried balances and help build your credit score.
What are credit cards?
A young person can build a credit history under supervision by being added to a parent's credit card account as this.
What is an authorized user?
If you stop making payments on your auto loan, the lender has the right to do this to your car.
What is seize (or repossess) it?
Providing a large down payment when purchasing a home will cause your monthly mortgage payment to do this.
What is decrease?
This is the amount you are charged to borrow money.
What is the interest rate?
To avoid being charged interest on a credit card, you must do this every single month.
What is pay the balance in full?
This specific type of credit card requires an upfront deposit and is often used by people trying to build or rebuild their credit history.
What is a secured credit card?
An auto loan is considered this type of debt because it is backed by collateral.
What is secured debt?
This type of mortgage guarantees that your interest rate will never change over the entire life of the loan.
What is a fixed-rate mortgage?
Paying this smallest allowed amount each month keeps your account in good standing, but it is recommended to pay your balance in full instead.
What is the minimum payment?
This type of card requires collateral to open, but allows those with little to nocredit history to get a credit card.
What is a secured card?
If you intend to carry a balance, it is good advice to prioritize a card with a low one of these.
What is an APR (Annual Percentage Rate) or Interest Rate?
If your auto loan has a longer term, your monthly payments may be lower, but you will pay more in this over the life of the loan.
What is total interest?
This type of mortgage has an interest rate that changes based on the market, which means your monthly payments may change.
What is an adjustable-rate mortgage (or variable-rate loan)?
This is the formal process of paying off a debt in regular installments over a period of time. You usually can see this schedule in a Loan Calculator if you look hard enough!
What is amortization?
You should review this standardized table in detail to evaluate a credit card's terms, fees, and interest rates.
What is the Schumer Box?
Some credit cards allow you to take money out of an ATM. This is called a.....
What is a Cash Advance?
Because you pay it off with scheduled payments over time, a car loan is considered this type of credit, as opposed to revolving credit.
What is an installment loan?
These are extra costs that you have to pay before taking possession of a home, usually on the day your handed the keys!
Closing Costs