37757775
Description
Flashcards by Katrina Smith, updated more than 1 year ago
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Created by Katrina Smith
over 1 year ago
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| Question | Answer |
| Amortization | Process of paying back a loan (principal plus interest) by equal periodic payments |
| Amount Financed | Cash price less down payment |
| Annual Percentage Rate (APR) | Ture 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 credit card. it is recorded as another purchase and is used in the calculation of the average daily balance. |
| Credit Card Act | A federal statute passed in 2009 to provide fair and transparent practices to the extension of credit. |
| Daily Balance | Calculated to determine customers finance charge: previous balance + any cash advantage + purchases - payments |
| Deferred payment price | Total of all monthly payments plus down payment |
| Down Payment | Amount of initial cash payment made when item is purchased |
| Fair credit and charge card disclosure act of 1988 | Act that tightens controls on credit and 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 amount | 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 rage. The law does not dictate what can be charged. |
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