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Building Credit

Risks TroubleTypes

of CreditFees

Final Jeopardy

300

500

300

Charge imposed for not paying on time.

Late payment fee

Fee charged for using the credit card even when you pay off the balance

in full every month.

Minimum finance charge

The process of moving an unpaid credit card debt from one issuer to

another.

Balance transfer

The interest-free time a lender allows between the transaction date

and the billing date.

Grace period

A loan that is paid in equal monthly installments with a fixed interest

rate.

Installment credit

This “C” refers to the way you handle money and have repaid debt in the

past.

Character

This “C” refers to the value of your assets or what you

own.

Capital

Establishing a steady work record and paying bills promptly both help

with this.

Daily Double!!!

Building Credit History

This “C” refers to your ability to pay the debt after considering other monthly

expenses.

Capacity

A document containing financial information about a person, focusing

on his or her history of paying obligations, such as a mortgage, car payment, utilities, and credit cards.

Credit Report

The maximum amount you can charge on a credit account.

Credit Limit

The low rate charged by a lender for an initial period to entice customers

to switch credit cards.

Introductory or teaser interest rate

Have passed a preliminary credit-information screening to qualify for

a credit card.

Pre-approved

When will you lose your grace period on a credit card?

When you carry a balance

This short term loan can have interest rates as high as 300%.

Payday Loans

60% of people don’t pay debt for this reason.

Loss of Income

The first step to take if you can’t pay your bills.

Take a look at your budget.

You combine your debts to make only one payment, usually lower

than the total amount of your monthly debt payments.

Loan Consolidation

A legal procedure that withholds a portion of your earnings for the payment of

debt. It also sounds like a sprig of

parsley on your plate.

Garnishment

A legal agreement between a lender and a debtor.

Permits lender to collect part of debtor’s wages from an employer if debtor fails to make regular payments.

Assignment

Items and services are paid for in a single payment, within a given time period, after the purchase. Interest is usually

not charged.

single-payment credit

Many items can be bought using this plan as long as the total amount does not go over

the credit user’s assigned dollar limit.

revolving credit

Merchandise and services are paid for in two or more

regularly scheduled payments of a set amount. Interest is

included.

installment credit

What credit companies would like you to continue to pay them.

Minimum Payment

Ideally what you can do to avoid paying interest on credit cards if you

do make purchases with them.

Pay the entire balance on time.

If interest rates are low and a person borrows the maximum they can

tolerate, what is the biggest risk to them?

Interest Rate Increase