WorksheetsVocab for Credit Card and Loans Unit
Total questions: 20
Worksheet time: 10mins
Property (e.g., bank account savings, home, car) required by a lender to guarantee
repayment of a loan. If a borrower fails to make payments, the collateral can be seized to make
loan payments.
Amortization
Collateral
Credit
Annual Percentage Rate (APR)
The total cost of credit on an annual basis expressed as a
percentage (e.g., an 18% APR on a credit card).
Annual Percentage Rate (APR)-
Interest Rate
Fixed Interest Rate
Installment (Closed-End) Credit
Amortization
An individual (e.g., family member) or institution (e.g., bank) that lends money to
people.
The price that people pay to borrow money. When people make loan payments,
interest is a part of the payment.
A method for computing equal payment for a loan.
Consumer Debt-to-Income Ratio
A plastic card used by consumers to purchase goods and services on credit.
The accumulated amount of borrowed money that is owed by individuals, businesses,
and government entities.
A measure of a consumer’s ability to take on existing debt.
It is calculated by adding up all monthly consumer debt payments (e.g., credit cards, auto and
student loans, family loans) and dividing this total by total monthly net (take-home) income.
A plastic card used by consumers to purchase goods and services on credit.
Credit
Debt
Creditor
Credit Card
someone might buy
a car or furniture or a computer on credit and make monthly payments of principal plus interest
until the loan is repaid.
True
False
Debt
The accumulated amount of borrowed money that is owed by individuals, businesses, and government entities.
The price that people pay to borrow money. When people make loan payments
An individual (e.g., family member) or institution (e.g., bank) that lends money to
people.
An individual (e.g., family member) or institution (e.g., bank) that lends money to
people.
Interest
Credit
Principal
Creditor
Interest
The amount required by a creditor to be paid monthly to keep a credit card account in good standing.
A high rate of interest charged on credit cards, typically between 20% to 30%, when consumers violate contract terms
The price that people pay to borrow money. When people make loan payments, interest is a part of the payment.
Fixed Interest Rate
The original amount of money borrowed, or the amount still owed, on a loan or credit card.
The cost of borrowing money expressed as a percentage of the amount borrowed (principal).
An interest rate that remains the same throughout the life of a loan
A type of credit where borrowers pay the same amount each month for a specified number of months (e.g., $400 car payment for 60 months) to repay what
they owe.
Installment (Closed-End) Credit
Interest
Interest Rate
The cost of borrowing money expressed as a percentage of the amount
borrowed (principal).
Minimum Payment
Penalty APR
Secured Loans
Interest Rate
Minimum Payment
The amount required by a creditor to be paid monthly to keep a credit card account in good standing.
A high rate of interest charged on credit cards, typically between 20% to 30%, when consumers violate contract terms
Loans that are backed with some type of collateral
Penalty APR
A type of credit where borrowers pay the same amount each
month for a specified number of months to repay what
they owe.
A high rate of interest charged on credit cards, typically between 20% to 30%, when consumers violate contract terms
The accumulated amount of borrowed money that is owed by individuals, businesses, and government entities.
When borrowers make payments, a portion of their payment is principal and another
portion is interest.
False
True
A type of credit that allows borrowers to continue to add
purchases to an outstanding balance. Credit cards are an example. You can make purchases,
pay off a certain amount, and then charge more (up to a specified maximum limit). The amount
borrowers owe will change over time.
Service Credit
Variable Interest Rate
Unsecured Loans
Revolving (Open-End) Credit
Loans that are backed with some type of collateral
Secured Loans
Unsecured Loans
Service Credit
Service Credit
A type of credit that allows borrowers to continue to add
purchases to an outstanding balance.
Short-term credit related to the purchase of a service that can’t be priced ahead of time
The accumulated amount of borrowed money that is owed by individuals
Unsecured loans typically DO NOT charge higher interest rates than secured loans.
True
False
An interest rate that can change (increase or decrease) throughout the life of a loan
Interest
Variable Interest Rate
Fixed Interest Rate
Penalty APR
