501-504 Vocabulary Practice Flashcard (Credit Basics & Credit Cards)

Front

What are Payday Loans known for?

Back

Being a small loan, offered at a high interest rate and meant to be paid as soon as you receive your next paycheck.

Front

What is revolving credit?

Back

An open line of credit that can be used as long as you're under the credit limit.

Front

What does A.P.R. stand for?

Back

Annual Percentage Rate.

Front

What is an annual fee in the context of credit cards?

Back

A yearly fee that may be charged for having a credit card.

Front

What does cash back refer to in the context of credit cards?

Back

A credit card benefit that pays the cardholder a small percentage of their net expenditures.

Front

What is a credit limit?

Back

The maximum amount of credit that a lender extends to a borrower.

Front

What is the difference between secured and unsecured credit?

Back

Secured credit is backed by collateral, while unsecured credit is not.

Front

What is a credit score?

Back

A numerical representation of a borrower's creditworthiness.

Front

What is the purpose of a credit report?

Back

To provide a detailed account of an individual's credit history.

Front

What is a balance transfer?

Back

The process of moving debt from one credit card to another, often to take advantage of lower interest rates.