Transcript Chapter 16 Credit in America

Chapter 16
Credit in America
What Is Credit?
 Money borrowed to buy something
now, with the agreement to pay for it
later.
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The Vocabulary of Credit
Borrower or debtor
Creditor
Capital
Collateral
Principal
Finance charge
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Advantages and Disadvantages of
Consumer Credit
Advantages
Purchasing power
Emergency funds
Convenience
Deferred billing
Proof of purchase
Safety
Disadvantages
Higher costs
Finance charges
Tie up income
Overspending
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Kinds of Credit
Open-ended credit
 Open 30-day accounts
 Revolving credit accounts
 Credit card terms
Closed-end credit
Service credit
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Credit Card Terms
Annual percentage rate (APR)
Free period (grace period)
Annual fees
Transaction fees and late fees
Method of calculating the finance
charge
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Sources of Credit
Retail stores
Credit card companies
Banks and credit unions
Finance companies
Pawnbrokers
Private lenders
Other sources of consumer credit
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What is good credit
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Credit Records
Your credit file
How information is gathered and
used
Types of information stored
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Credit Bureaus
Major U.S. credit bureaus
 TransUnion
 Experian
 Equifax
Credit history
Credit report
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Credit Ratings
Point system
How reliably money is paid back
 Excellent credit rating
 Good credit rating
 Fair credit rating
 Poor credit rating
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Credit Reports
Summary of information
Public record information
Credit information
Account detail
Requests for credit history
Personal information
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Credit Laws
Consumer Credit Protection Act
Fair Credit Reporting Act
Fair Credit Billing Act
Equal Credit Opportunity Act
Fair Debt Collection Practices Act
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