Try It

Credit Terms Review

Match each term to its definition.

Definitions:

  1. when you have a service performed now, but agree to pay for it later
  2. period of time during which you can pay your bill without incurring a finance charge.
  3. something pledged as security for repayment of a loan
  4. measure of the cost of credit expressed as a yearly rate
  5. an interest rate that can vary over the life of a loan
  6. a charge assessed by a financial institution if payment is received after the due date
  7. flat, yearly charge for use of the credit card
  8. loan that is made on a continuous basis, no set payment
  9. fee charged when you get cash using your credit card
  10. measure of the cost of credit, expressed as a percent.

Terms:

  • late fee
  • Annual Percentage Rate (APR)
  • grace period
  • service credit
  • collateral
  • variable rate
  • annual fee
  • open ended credit
  • cash-advance fee
  • interest rate

Answers:

  1. when you have a service performed now, but agree to pay for it later

    Answer: service credit

  2. period of time during which you can pay your bill without incurring a finance charge.

    Answer: grace period

  3. something pledged as security for repayment of a loan

    Answer: collateral

  4. measure of the cost of credit expressed as a yearly rate

    Answer: Annual Percentage Rate (APR)

  5. an interest rate that can vary over the life of a loan

    Answer: variable rate

  6. a charge assessed by a financial institution if payment is received after the due date

    Answer: late fee

  7. flat, yearly charge for use of the credit card

    Answer: annual fee

  8. loan that is made on a continuous basis, no set payment

    Answer: open ended credit

  9. fee charged when you get cash using your credit card

    Answer: cash-advance fee

  10. measure of the cost of credit, expressed as a percent.

    Answer: interest rate