Flashcards
Topic 6 Borrowing Prdoucts > Key Terms
Cards in this deck (25)
- 1APR [Annual Percentage Rate]the total cost of borrowing over one year, including interest charged and any fees.
- 2Balance transfermoving the balance (total amount owed) on a card from one provider to another
- 3Card Verification Value [CVV]three numbers on the back of a credit card or debit card
these are a security measure designed to prevent fraudulent use of the card by someone other than the cardholder - 4Cashback Carda type of card that gives back to the cardholder a percentage of the value of transactions made with the card, in the form of cash
- 5Charge Carda credit card that must be repaid in full at the end of every month
- 6Consumer Creditaka : "borrowing"....
It is important to understand that "taking credit" or "buying credit" refers to borrowing.
However a credit into a bank means paying money in. - 7Cost of Borrowingaka: "cost of credit"....
the total amount that the borrower will be charged including interest and any fees.
for personal loans and credit card borrowing over a 12 month period must be quoted - the annual percentage rate [APR] - 8Credit Agreementthe formal agreement between a provider and a borrower setting out:
- the amount borrowed ,
_ the interest charged,
_ the arrangements for repayments
_ and any other terms and conditions. - 9Credit Carda card that allows the card holder to make purchase face-to-face ; online ; online and
withdraw from an ATM.
Unlike a debit card ,where the money is taken from the holders own account, transactions are paid by the card provider.
The card holder repays the amount owed to the provider either in one payment or installments.
The provider charges interest on cash withdrawals from the time the withdrawal is made and on purchases after a certain period. - 10Credit HistoryA record of money borrowed and repaid by an individual. These records are held by credit record agencies and providers will check the individual's credit history when a prospective customer applies for a borrowing product.
- 11Credit Uniona mutual organisation [owned by its members] that provides a range of financial product to its members e.g. savings accounts, personal loans.
Members must share a common bond e.g. all work for the same employer or all work in the same district. - 12Current accounta bank or building society where people can store their money in the form of an electronic balance and withdraw it to make payments.
- 13Debit carda card that can be used to withdraw cash, to make face-to-face transactions in for example a store, and to make payments online or over the phone.
- 14Direct Cebitan electronic payment into an account , for example a salary or benefits payment
- 15Direct Debitan electronic payment out of an account. The amount and frequency can vary.
- 16EAR [Equivalent Annual Rate]the cost of borrowing using an overdraft.
This includes only the interest rate, as fees are listed separately - 17InterestMoney either paid or charged to an account holder by the provider.
It is paid on savings accounts and some current accounts and also charged on borrowing., e.g. an overdraft.
Each provider decides its rate it will pay or charge, depending on the type of account and in some cases the credit history of the individual account holder. - 18Interest Ratethe amount expressed as a percentage that a financial services provider pays to a server or charges a borrower when it lends money.
- 19Mortgagea loan taken out to pay for a property, usually over a long term such as 25 years
- 20Overdrafta facility that allows the account holder to withdraw more money than they actually have in their account.
- 21Payday Loana loan designed to be taken out for only a very short period, which charges very high APR
- 22Payment allocationthe order of which a card provider uses money paid into an account to pay off the amount outstanding
- 23Personal Loana product which allows someone to borrow at a
-fixed amount
-over a fixed period
-at a fixed amount of interest. - 24Standing orderan electronic payment out of an account. Used to make regular payments of the same amount
- 25Store Carda card issued by a retailer that the holder can use to make purchases within that store or group of stores.
As with a credit card the amount owing is a paid of at a later date either in one payment or in installments and interest is charged on the amount owed.
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- A level Business Studies (Topic 06 : Borrowing products) Flashcards on Topic 6 Borrowing Prdoucts > Key Terms, created by Dawn S_akura on 19/12/2016.
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- Dawn S_akura
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