Understanding Credit Terms and Definitions

Which is the correct definition of a Debtor

• the person that is borrowing

• the person who or institution that is providing the credit

Which is the correct definition of a Creditor

• person that is borrowing

• the person who or institution that is providing the credit

Which one is NOT a way you can qualify for credit

• Income

• Financial position-capital

• Collateral

• go to the bank

When making a payment on a credit card what does principal mean

• amount borrowed

• cost of money the money you borrowed

• other fees charged to borrow money

• minimum amount due each pay period on credit

When making a payment on a credit card what does interest mean

• amount borrowed

• cost of the money you borrowed

• other fees charged to borrow monwy

• minimum amount due each pay perion on credit

When making a payment on a credit card what does finance charges mean

• amount borrowed

• cost of the money you borrowed

• other fees charged to borrow money

• Minimum amount due each pay period on credit

When making a payment on a credit card what does minimum payment mean

• amount borrowed

• cost of the money you borrowed

• other fees charged to borrow money

• minimum amount due each pay period on credit

Which is NOT an advantage of credit

• Build a good credit score

• money when you need, in case of emergency

• Build capital

• be able to spend a lot of money you can't pay back

What is NOT a disadvantage of credit

• build up debt

• high interest fees

• stolen idenity

• you have something for emergencies that come up

What is the meaning of Open End Credit

• as long as you are in good standing, credit is available whenever you want or need it

• Credit that once used AND paid off. It goes away