Financial Algebra Ch 4

account number : A unique number that identifies a credit card holder.

annual percentage rate (APR) : The interest rate paid per year or charged per year.

billing cycle : A predetermined amount of time set by the credit card company that is used for calculating a credit card bill.

billing date : The date that a credit card statement was written.

credit calendar : A calendar method of finding the average daily balance of a credit card.

credit card : A type of credit card account that has a revolving charge where the entire bill does not have to be paid in full each month.

creditor : Organization or person who extends credit to debtors.

debit card : A card that acts like an electronic check and is not a credit or charge card; with each purchase, the amount is deducted from a checking account; purchases may not exceed the balance in the account.

Electronic Funds Transfer Act : The law that protects debit card users against unauthorized use of their cards; users are not responsible for purchases made with a lost or stolen card after the card is reported missing.

Fair Credit Billing Act : The law that gives protection to a consumer in the case of errors on a monthly credit card statement; consumers are not responsible for a disputed amount or the finance charges that amount accrues, until the error is cleared up.

installment plan : A method of payment of a purchase or services over a period of time.

interest : The finance charge or fee that is charged to an installment buyer when paying for a purchase or service over time.

minimum payment : An amount that is the lowest payment the credit card company will accept for the current billing period.

monthly periodic rate : The APR divided by 12; the rate of interest charged each month.

payments/credits : The total amount received by the creditor that is applied to the account.

prepayment penalty : An amount borrowers pay as a fee if they wish to pay back an entire loan before the due date.

revolving charge account : A type of credit card where the entire bill does not have to be paid in full each month; there is a minimum monthly payment and finance charge the month following any month were the bill is not paid in full.

transaction : A purchase, cash advance, or payment made using a credit card.