What is Credit?
Credit is the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
Also, if you have any word that you want to know more about, visit this definition page that I created below. These definitions were found from McGraw-Hills book called consumer education and economics book. Find it here: http://glencoe.mheducation.com/sites/0078767806/index.html
Bankruptcy |
Acceleration Clauses |
Bankruptcy is a legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor, which is most common, or on behalf of creditors, which is less common.
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A contract provision that allows a lender to require a borrower to repay all or part of an outstanding loan if certain requirements are not met. An acceleration clause outlines the reasons that the lender can demand loan repayment. Also known as acceleration covenant.
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Grace Period |
Credit Score |
The grace period is the provision in most loan and insurance contracts that allows payments to be received for a certain period of time before the actual due date.
Credit Card CompaniesThere is four main credit card companies. They are Visa, MasterCard, American Express, and Discover. All of these credit card companies are very famous, and are used in most places around the world. Visa and MasterCard, though, are even above A.E. and Discover. There are used in pretty much 99% of stores across the United Sates, while A.E. and Discover aren't very far behind, with a percentage in the mid-ninety range.
The Credit CardThe credit card is a payment card issued to users that allow them to pay for goods and services.
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A credit score is a statistical number that basically shows how good people are at managing their credit. If you had a good credit score, it would be easy to get the car that you want, as long as you have the money to get it. You are also more likely to get bigger loans from banks to buy big things if you have a good credit score, because they will trust that you will pay it back based on your score. Below is a video that shows what could happen to you if you have a bad credit score.
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The Three C's of Credit
[C]haracter |
[C]apacity |
[C]apital |
Character means your track record for repaying debts. It represents how responsible you are when it comes to credit.
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Capacity shows a person's ability to repay loans from the bank. Like character, this is something that requires responsibility to be good.
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Capital basically means the money that is used to generate wealth through investments. It represents the money paid on certain items or accounts.
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Balloon Paymenta balloon payment is a repayment of the outstanding principal sum made at the end of a loan period.
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DebtDebt is money that you owe to a company. A main cause of gong into debt is not paying of a bill that is charged by a company or not paying back a loan. Debt can be a very painful process to recover from, and it is something that people from around the world fear financially.
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Recovering From DebtWhen you go into debt, it is important that you plan out all your purchases and reach out for help. To the left is a video to help you better understand what debt is, and what you can do to stop yourself from having it in your life before it is too late.
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Loans and Loan SharksA loan is a thing that is borrowed from a person or company. These can be insanely useful if you are looking at buying big things, but it just doesn't fit your budget to put a bunch of money into it all at once. As long as you KNOW that you can pay them off, they really do help out a ton. When it comes to loans, though, there's some people out there that just don't agree with the law. These people are called Loan Sharks. What loan sharks do is they get you to sign a contract for a loan, while charging an extremely high amount of interest. You are forced to do this when you are desperate, and they just end up sending you down a never-ending staircase to bankruptcy. Loan Sharks? Not good.
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Down-Payment
Down Payment is the initial payment that is made when you buy an item or a service through credit. It is the set amount and varies based on what you are buying, obviously.
Thank you to http://www.investopedia.com/ for making a lot of this website possible. This website contains a ton of information about finance. Go check them out!