39852094
Description
Flashcards by Laura Samuelson, updated 3 months ago
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Created by Laura Samuelson
3 months ago
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| Question | Answer |
| Amortization | Process of paying back a loan (principal + interest) by equal periodic payments |
| Amount Financed | Cash price - down payment |
| Annual Percentage Rate (APR) | True or effective annual interest rate charged by sellers. Required to be stated by Truth in Lending Act |
| Average Daily Balance | Sum of daily balances divided by number of days in billing cycle |
| Cash Advance | Money borrowed by holder of a credit card. It is recorded as another purchase and is used in the calculation of the average daily balance |
| Daily Balance | Calculated to determine customer's finance charge: Previous Balance + Any Cash Advances + Purchases - Payments |
| Deferred Payment Price | Total of all monthly payments + down payment |
| Down Payment | Amount of initial cash payment made when an item is purchased |
| Fair Credit and Charge Card Disclosure Act of 1988 | Act that tightens controls on credit card companies soliciting new business |
| Finance Charge | Total payments - Actual loan cost |
| Installment Loan | Loan paid off with a series of equal periodic payments |
| Loan Amortization Table | Table used to calculate monthly payments |
| Open-End Credit | Set payment period. Also, additional credit amounts can be added up to a set limit. It is a revolving charge account |
| Outstanding Balance | Amount left to be paid on a loan |
| Revolving Charge Account | Charges for a customer are allowed up to a specific maximum, a minimum monthly payment is required, and interest is charged on balance outstanding |
| Truth in Lending Act | Federal law that requires sellers to inform buyers, in writing, of (1) the finance charge and (2) the annual percentage rate. The law doesn't dictate what can be charged |
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