CH 4 Ramsey- Credit and Debt

A fee that a bank, credit card, or other lender charges for the opportunity to purchase something and pay for it over time is called:

• Interest

• Dividend

• Credit

• Finance Rate

What is debt?

• Money that is spent

• Money that is owed because of borrowing

• Money that you lend to others

A measure of an individual's credit risk; calculated from a credit report using a standardized formula.

• credit score

• credit report

• depreciation

• introductory rate

A decrease or loss in value.

• inflation

• depreciation

• debt snowball

• tax deduction

Time frame that a loan agreement is in force and at the end of which the loan should be repaid.

• Annual fee

• Term

• Annual Percentage Rate

• Cycle of debt

Which of the following is most likely to represent a fixed rate, secured debt?

• Installment credit

• Equity

• Revolving credit

• A student loan

Long term failure to repay a loan according to the terms agreed to, which has a substantial negative impact on the borrower's credit score

• Default

• Grace Period

• Late Payment Fee

• Revolving Credit

Something valuable that the lender can take as payment if you can't or don't repay your secured loan

• Balance Transfer

• Amortization

• Interest

• Collateral

They are called revolving credit accounts because

• it was a revolutionary concept when first created.

• these accounts circle around your credit.

• they can be an ongoing cycle of borrowing and repaying.

What your asset is worth minus what is owed

• Lien

• Equity

• Credit

• Debt