Term
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Definition
| Involves receiving cash, goods, or services with an obligation to pay later. |
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Term
| Open credit / revolving debt |
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Definition
| Refers to a line of consumer credit extended before you make a purchase. You can pay it back at whatever pace you want, as long as you pay a minimum balance each month. |
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Term
| Annual percentage rate (APR) |
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Definition
| The true simple interest rate paid over the life of the loan; it is a reasonable approximation for the true cost of borrowing. |
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Term
| Method of Determining the Balance (Balance Calculation Method) |
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Definition
| The method by which a credit card balance is determined; the finance charges are then based on the level of this balance. |
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Term
| Order of credit card fees (and the order the outstanding balance is calculated) |
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Definition
| 1) annual fees and service fees; 2) interest and transaction charges; 3) billed cash advances; 4) billed merchandise; 5) unbilled balances; 6) unbilled merchandise purchases. The minimum monthly payment is $10 or 3% of the present balance, whichever is greater. |
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Term
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Definition
| The length of time given to make a payment before interest is charged against the outstanding balance on a credit card. |
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Term
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Definition
| A fixed annual charge imposed on a credit card. |
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Term
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Definition
| The percentage of the sale that the merchant pays to the credit card issuer. |
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Term
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Definition
| A fee imposed as a result of not paying your credit card bill on time. |
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Term
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Definition
| A fee imposed whenever you go over your credit limit. |
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Term
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Definition
| A credit card issued by a bank or large financial corporation, generally as a Visa or MasterCard. |
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Term
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Definition
| A bank credit card that offers credit limits as high as $100,000 or more in addition to numerous added perks, including emergency medical and legal services, travel services, rebates, and insurance on new purchases. |
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Term
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Definition
| A credit card issued in conjunction with a specific charity or organization. It carries the sponsoring group's name or picture on the card, and sends a portion of the annual fee or a percentage of the purchases back to the sponsoring organization. |
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Term
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Definition
| A credit card backed by the pledge of some collateral. If you cannot pay, the issuing bank takes possession of a specific asset of yours. It is sometimes the only card, people with bad credit ratings can get. |
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Term
| Travel & entertainment (T & E) card. |
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Definition
| A credit card initially meant for business customers to allow them to pay for travel and entertainment expenses, keeping them separate from their personal expenditures. The major difference between bank cards and T & E's is that T&E cards do not offer unlimited credit, and you have to pay off your monthly balance. |
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Term
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Definition
| A credit card that can be used only at a specific company. |
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Term
| Traditional charge account |
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Definition
| A charge account, as opposed to a credit card, that can be used to make purchases only at the issuing company. |
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Term
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Definition
| 1) Character. How stable are you? 2) Capacity. What is your current income level and your level of non-obligated funds?. 3) Capital. What is the size of your financial holdings? 4) Collateral. What assets or property can you offer to secure credit? 5) Conditions. what economic condition are you in (do you have work, are you laid off, etc.)? |
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Term
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Definition
| A company that gathers information on consumers financial history, including how quickly they pay bills and whether they have been delinquent. The company summarizes the info and sells it to customers. |
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Term
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Definition
| The numerical evaluation of credit applications based on the answers based to a simple set of questions. |
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