Cost of Credit and Types of Credit

Front

What is a finance charge?

Back

The total cost of borrowing, including interest and fees

Front

How can borrowers minimize credit costs?

Back

By securing a lower interest rate and making extra payments

Front

Where can you get a loan, and what to avoid?

Back

Banks; avoid high-cost options like payday loans.

Front

What factors to consider when applying for credit?

Back

Affordability, item necessity, fees, and lender reputation

Front

What is the difference between secured and unsecured loans?

Back

Secured loans require collateral; unsecured loans do not

Front

Installment loans require ______ monthly payments.

Back

fixed

Front

What are the characteristics of a mortgage?

Back

Secured by the home, with specific down payment and credit requirements

Front

What are payday loans, and what are their pros and cons? Options: Short-term, small amount, unsecured, high APR; Long-term, large amount, secured, low APR; Short-term, large amount, secured, high APR; Long-term, small amount, unsecured, low APR

Back

Short-term, small amount, unsecured, high APR

Front

Pawn shop loans use ______ as collateral.

Back

pawned item

Front

What is a credit card and its features?

Back

Allows for purchases on credit with monthly payments, paying in full avoids interest