Flashcards › Health & Life Skills › Personal Finance
Credit, Loans and Interest
Credit scores, cards, loans, insurance and taxes explained.
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- CreditTermBorrowing money or buying now and paying later
- DebtTermMoney you owe
- LoanTermMoney borrowed that must be paid back, usually with interest
- LenderTermA person or business that gives a loan
- BorrowerTermThe person who receives the loan
- Credit cardTermA card that lets you borrow money to buy things and pay later
- Credit limitTermThe most you can borrow on a card
- Minimum paymentTermThe smallest amount you must pay each month
- StatementTermA monthly summary of your card or account activity
- Due dateTermThe day a payment must be made by
- Late feeTermA charge for paying after the due date
- APRTermAnnual percentage rate, the yearly cost of borrowing
- Grace periodTermTime to pay a card balance without being charged interest
- Balance (credit card)TermThe amount you currently owe
- Paying in fullTermPaying the whole statement balance so no interest is charged
- Credit scoreTermA number that shows how reliably you pay back debts
- Credit score range (FICO)Term300 to 850
- What helps a credit scoreTermPaying on time and keeping balances low
- What hurts a credit scoreTermMissed payments and maxing out cards
- Credit reportTermA record of your borrowing and payment history
- Credit bureauTermA company that collects credit reports; Equifax, Experian, TransUnion
- UtilizationTermThe share of your credit limit you're using
- Good rule for credit utilizationTermStay below about 30 percent
- Secured credit cardTermA card backed by a cash deposit
- CosignerTermA person who promises to pay if the borrower doesn't
- CollateralTermProperty pledged to a lender if a loan isn't paid
- MortgageTermA loan to buy a home
- Down paymentTermMoney paid upfront when buying something expensive
- Auto loanTermA loan to buy a car
- Student loanTermA loan to pay for school
- Payday loanTermA very high-cost, short-term loan that is risky
- Interest rateTermThe percent charged for borrowing
- Fixed rateTermAn interest rate that stays the same
- Variable rateTermAn interest rate that can change
- Term (loan)TermHow long you have to repay
- AmortizationTermPaying off a loan in regular payments over time
- DefaultTermFailing to repay a loan
- BankruptcyTermA legal process when someone cannot pay their debts
- RepossessionTermA lender taking property when a loan isn't repaid
- Debt snowballTermPaying off the smallest debt first
- Debt avalancheTermPaying off the highest-interest debt first
- Identity theftTermSomeone using your personal information without permission
- Credit freezeTermA lock on your credit file to block new accounts
- InsuranceTermPaying a fee so a company covers big costs if something bad happens
- PremiumTermThe regular payment for insurance
- DeductibleTermThe amount you pay before insurance pays
- Health insuranceTermCoverage for medical costs
- Auto insuranceTermCoverage for car accidents and damage
- Renters insuranceTermCoverage for belongings in a rented home
- Life insuranceTermA payment to family after someone dies
- WarrantyTermA promise that a company will repair or replace a faulty product
- Social Security numberTermA nine-digit US number used for work and taxes; keep it private
- W-2TermA form from an employer showing yearly pay and taxes withheld
- W-4TermA form telling an employer how much tax to withhold
- Tax returnTermA form reporting your income and taxes to the government
- Tax refundTermMoney returned when you paid too much in taxes
- 401(k)TermA US employer retirement savings plan
- IRATermIndividual retirement account
- Roth IRATermA retirement account with taxed deposits and tax-free growth
- Employer matchTermMoney an employer adds to your retirement savings
- FDICTermUS agency that insures bank deposits, up to $250,000 per depositor per bank
- Rule of 72TermDivide 72 by the interest rate to estimate years to double money
- Compound growth exampleTerm$100 at 7% roughly doubles in about 10 years
- OverdraftTermSpending more than your account holds
- Overdraft feeTermA charge for overdrawing an account
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