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Description
Flashcards by ALEIA CRANDALL, updated 7 months ago
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Created by ALEIA CRANDALL
7 months ago
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| Question | Answer |
| Amortization | the process of paying back a loan (principal plus interest) by equal periodic payments |
| Amount Financed | cash price minus down payment |
| Annual Percentage rate (APR) | the true or effective annual interest rate charged by sellers. required to be stated by Truth in Lending Act |
| Average Daily Balance | the sum of daily balances / 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 customer's finance charge: (previous balance + any cash advantage + purchases - payments) |
| Deferred Payment Price | total of all monthly payments + 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 the finance charge and the annual percentage rage. the law does not dictate what can be charged |
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