1. Chapter 18
Jordan May
Credit is lending money that
must be repaid

2. Finance Charge
• interest or a fee charged for borrowing money
or buying on credit.

3. Interest rate
• the percentage of a sum of money charged for
its use

4. Credit Card Companies
• Visa
• MasterCard
• Discover
• American Express

5. Credit Rate
• Why do I need to know
– You need to know your credit score so you will know if people deny you a loan
• Good score
– I have had a credit card with a limit above $5,000
– I have not been more than 60 days late on any credit card, medical bill, or loan
payment in the last year
• Bad score
– I have had my own credit card for less than three years or never had one
– I have a limited credit history, for example I am a student, or new to the
country, or a young person working for a living, or I have been an authorized
user on someone else's credit card
– I have a valid credit score that can be found at one of the major credit
reporting companies.
• When do I check
– You check whenever you are going to apply for a loan or job

6. Credit Benefits
• Use someone else's money
• Easy to use

7. Credit Problems
• You have to remember to pay the money back
• Easy to lose and have stolen

8. Interest
• I=PxRxT

9. Credit Application
• an application for a line of credit
• You fill one out every year

10. Truth In Lending Law
• protects borrowers and consumers against
unfair lending practices. It requires lenders to
honestly disclose all loan details, so that
borrowers can efficiently compare rates with
other lenders.

11. Fair Credit Billing Act
• is a United States federal law enacted as an
amendment to the Truth in Lending Act. Its
purpose is to protect consumers from unfair
billing practices and to provide a mechanism
for addressing billing errors in quot;open endquot;
credit accounts, such as credit card or charge
card account