Unit 4: Credit

A type of credit where you can borrow money repeatedly up to a certain limit, and your payment amount changes depending on how much you've borrowed. Credit cards are a common example.

A type of credit where you borrow a fixed amount of money and pay it back in equal payments over a set period of time. Car loans and mortgages are examples.

 A period of time, usually on credit cards, during which you can pay off your balance without being charged interest.

• minimum payment

• annual fee

• grace period

• billing cycle

The percentage of your available credit that you are currently using. It's calculated by dividing your current credit card balances by your total credit limit.

• minimum payment

• credit utilization rate

• available credit

• credit limit

Borrowing money or buying something now and promising to pay for it later, often with extra money added (interest).

The extra money you have to pay when you borrow money or use credit. It's an extra charge for borrowing.

• principal

• grace period

• debt

• interest

The original amount of money you borrow, before any extra charges (interest) are added.

• principal

• debt

• annual fee

• interest

The total amount of money you owe, including the original amount you borrowed and any extra charges.

• principal

• debt

• annual fee

• interest

A number that shows how likely you are to pay back money you borrow. A higher number means you're more likely to pay it back.

• credit score

• credit report

• credit limit

• credit history

A record of how you've used credit in the past, like a report card for borrowing money.

• credit score

• credit report

• credit limit

• credit history