Chapter 10 Study Guide - Paige Lee Chapter Ten Consumer...

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Paige Lee Chapter Ten Consumer Study Guide Vocab 1. Credit a. Ability to borrow money in return for a promise of future repayment 2. Equity a. The difference between the amount owed on a home and the home’s value 3. Creditworthiness a. A measure of your ability and wiliness to repay a loan 4. Character a. A measure of your financial responsibility, often based on your credit history 5. Credit History a. A record of your past borrowing and repayments 6. Cosign a. A contractual agreement to pay a debt if the borrower does not pay it 7. Capacity a. A measure of financial ability to repay a loan 8. Capital a. The value of what you own, including savings, investments, and property 9. Credit Bureau a. Company that collects information about your credit history and sells it to lenders 10. Credit Rating a. A measure of your creditworthiness, often computed as a numerical score 11. Secured Loan a. A loan backed by something of value pledged to ensure payment 12. Collateral a. Property pledged to back a loan 13. Installment Loan a. A loan to be repaid in a certain number of payments with a certain interest rate 14. Unsecured Loan a. A loan not backed by any collateral 15. Regular Charge Account a. A charge account that requires the balance to be paid in full from one month to the next 16. Revolving Charge Account a. A charge account that allows you to carry a balance from one month to the next, and you pay interest on the unpaid balance 17. Grace Period a. The time between the billing date and the payment due date when no interest is charged 18. Credit Limit
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Paige Lee a. The maximum amount that you may charge on your credit account 19. Finance Charge a. The total amount a borrower must pay for a loan 20. Annual Percentage Rate a. The finance charge calculated as a percentage of the amount borrowed 21. Acceleration Clause a. A statement in a credit contract that requires you to repay the entire loan immediately if you miss a payment 22. Balloon Payment a. A final loan payment that is much larger than the regular monthly payments 23. Identity Theft a. A type of fraud that involves using someone else’s identity to get cash or buy products using credit, or to access financial accounts that belong to the victim 24. Debt Consolidation Loan a. A large loan used to pay off a number or smaller loans 25. Bankruptcy a. Legal process for selling most of a consumer’s [property to help satisfy debts that he or she cannot pay in exchange for relieving the consumer of the debt obligations Questions 1. I can identify reasons to borrow and the trade-offs I make when I borrow.
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  • '09
  • Debt, Credit card, Paige Lee

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