Test 5

• APR?

  The interest rate that the user of a credit card will pay. The APR advertised by creditors varies and should be used to compare different credit card offers.
• Credit?


  Making purchases now and paying for them later (also known as borrowing!).
• Credit card?

  A plastic card used to make purchases now and pay for them later.
• Creditor?


  Any bank or business that extends credit to others; a lender.
• Debit card?


  A plastic card that can be used to instantly deduct funds from your checking account.
• Debtor?

  Anyone who owes money; a borrower
• Finance charge?

  A fee for borrowing money, added to a monthly credit card bill.
• Interest rate?


  The fee, expressed as a percentage, a borrower pays for the use of a creditor’s money. At an interest rate of 10%, a borrower would pay $110 for $100 borrowed.
• Introductory rate?

  A temporary interest rate advertised as a low APR to entice customers to apply for a credit card. After the introductory period, the interest rate will increase to the regular APR.
• Late fees?

  Additional fees that can be added to a credit card bill if the cardholder fails to make at least the minimum payment by the due date.
• Minimum payment?

  The smallest required payment that a credit card holder can pay on a monthly bill and still remain in good standing with the lender.
• Principal?


  The amount of money borrowed. On a credit card bill, the principal is the purchase price of all items bought with the card.