Banking and Types of Credit Flashcard

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What is the definition of a commercial bank?

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Financial institutions that offer services like checking accounts, loans, and mortgages to individuals and businesses.

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What does a credit score represent?

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A number that shows how reliable you are at paying back borrowed money.

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What is an interest rate?

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The yearly cost of borrowing money, expressed as a percentage of the loan amount.

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What is a credit card?

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A plastic card that allows you to borrow money from a bank to make purchases and pay it back later.

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What is the role of a credit bureau?

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An organization that collects information about people's credit history and provides reports to lenders.

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What does the annual percentage rate (APR) indicate?

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The yearly cost of borrowing money, expressed as a percentage of the loan amount.

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What is a credit union?

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A member-owned financial cooperative that offers banking services, often with lower fees and better rates than traditional banks.

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What are loans?

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Amounts of money that you borrow and agree to pay back over time with interest.

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What is a basic checking account?

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A simple type of bank account used for everyday transactions, such as deposits and withdrawals.

Front

What is the percentage charged on top of a loan or paid on savings, usually calculated annually?

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Interest rate