Credit Vocabulary

Open-Ended Credit

• Line of credit that requires periodic payments of part or all of the total, and lets you borrow UP TO a certain amount EACH MONTH

• A type of loan that must be repaid in full by the end of the term

• A credit card that offers rewards for every purchase

• A fixed loan amount that cannot be exceeded

Character

• A trait of being dishonest and avoiding responsibilities.

• A quality of being generous and giving to others.

• Honesty and willingness to pay debt when it is due.

• A tendency to be selfish and self-centered.

Capital

• Value of borrower's possessions.

• Total amount of money borrowed.

• Interest rate on a loan.

• Monthly payment due.

Capacity

• Ability to pay debt when it is due.

• The total amount of money a person has.

• The ability to borrow money from a bank.

• The maximum limit of a credit card.

Sales Credit

• Charging a purchase at the time you buy the good or service

• Receiving a discount on future purchases

• Paying for a service after it has been rendered

• Borrowing money to make a purchase

Credit

• The privilege of using someone else's money for a period of time

• A type of loan that must be repaid immediately

• A financial term for saving money

• A method of investing in stocks

Down Payment

• A payment made after receiving a loan

• The payment of part of the purchase price up front

• A fee charged by the lender for processing the loan

• An additional cost added to the loan amount

Multipurpose Card

• A card that can only be used at one specific store

• A credit card that can be used at many different stores and businesses for many reasons

• A card that is only for online purchases

• A debit card that can only be used for cash withdrawals

Mix of Credit Category

• 10% of credit score calculation involves having a variety of types of credit, such as credit cards and loans.

• Only closed-ended credit types are considered in credit score calculations.

• Credit scores are solely based on payment history and not on credit variety.

• Having multiple credit cards negatively impacts your credit score.

Creditor

• One who sells on credit or makes the loan

• A person who borrows money

• A financial institution that provides loans

• A type of investment vehicle