Ch 26 and 27 Flashcards Preview

Personal Finance > Ch 26 and 27 > Flashcards

Flashcards in Ch 26 and 27 Deck (23)
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1

cosigner

person who signs your contract and is responsible if you do not follow through

2

fair credit billing act

correct billing mistakes

3

Unsecured loan

not backed by collateral

4

usury law

restricts amount of interest that can be charged

5

Equal Credit Opportunity Act

Application can only be judged by financials
Denied must be told why
Can't be denied for low income, large current debts, poor payment record

6

fair debt collection practices act

collection agent must identify themselves
no harassment

7

garnishment of wages

some contracts allow creditors to take all/some of $$ from paycheck

8

Credit limit

maximum amount you can spend/charge

9

repossess

take collateral

10

FTC

Enforce laws of credit

11

truth in lending disclosure

All costs of borrowing must be known

12

Credit Burden

don't use more than 20% of your income for credit payments

13

What are the 5 C's

Capacity- ability to pay debt when due
Character- what kind of person you are
Capital- value of your possessions
Collateral- property or valuables (security for a loan)
Credit History- credit check through a credit bureau

14

Principal

amount borrowed

15

Credit bureau

agency that collects info about you and credit, provide credit reports, and scores.

16

How old do you have to be to apply for credit?

18

17

Grace Period

30 days

18

consumer credit protection act

helps consumers compare credit
stolen cards
requires creditors to inform consumers on cost of interest and terms

19

fair credit reporting act

incorrect info on files
right to know
right to be notified
right to privacy

20

overextending your credit

opening too many accounts and purchasing up to the credit limit

21

Bankruptcy

Relieved of all debts except student loan

22

Consolidation Loan

Combines all your debts into one loan with lower monthly payments

23

Secured Loan

Backed by collateral