NGPF Types Of Credit Answers 2022 [FREE Access]

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NGPF Types of Credit Answers – All Important Topics Covered

Below, we will be covering all quiz answer keys for the topic NGPF Types of Credit:

Q. Credit
Ans: Any arrangement where you get “stuff” (money, goods, services), and agree to pay for it in the future.

Q. Loan
Ans: An agreement where you are credited with a fixed amount (usually of money) for a fixed period of time, usually with interest.

Q. Interest Rate
Ans: The percentage charged for the privilege of borrowing money.

Q. Principal
Ans: The amount you borrow.

Q. Term
Ans: The amount of time you have to repay your principal.

Q. Collateral
Ans: Something valuable that the lender can take as payment if you can’t pay back your loan (like a house or car).

Q. Co-signer
Ans: Someone who legally agrees to take responsibility for a person’s debt if they cannot repay it.

Q. Secured debt
Ans: Debt is tied to a specific tangible asset that can be used as collateral and reposed if payments are not made.

Q. Unsecured debt
Ans: Debit NOT tied to a specific asset or that cannot be repossessed if payments are not made.

Q. Variable-rate loan
Ans: The interest rate can change, based on the prime rate or index rate, over the course of the loan.

Q. Fixed-rate loan
Ans: For this type of loan, the interest rate is determined before a loan is granted and remains constant as long as on-time payments are being made.

Q. Amortization
Ans: The paying off of debt with a fixed repayment schedule in regular installments over a period of time.

Q. Debit Card
Ans: A payment card that deducts money directly from a consumer’s checking account to pay for a purchase. Unlike credit cards, they do not allow the user to go into debt, except perhaps for small negative balances that might be incurred if the account holder has signed up for overdraft coverage.

Q. Credit Card
Ans: A card issued by a financial company gives the holder an option to borrow funds. They charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual’s credit rating.

Q. Schumer Box
Ans: A table that appears in credit card agreements shows basic information about the card’s rates and fees.

Q. Annual Percentage Rate (APR)
Ans: The rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan.

Q. Grace Period
Ans: The number of days between a consumer’s credit card statement date and payment due date when interest does not accrue. It is a window of time during which a consumer owes money to a credit card company for new purchases made during the last billing cycle but isn’t being charged interest.

Q. Minimum Payment
Ans: The smallest amount of a credit card bill that a credit card holder must pay each billing cycle.

Q. Penalty Annual Purchase Rate (APR)
Ans: It is a higher interest rate that can be triggered by the slightest infraction such as just one payment that is received a day late.

Q. Balance Transfer
Ans: Moving outstanding balances from one credit card to a new credit card, used by consumers who want to move their debt to a credit card with a lower interest rate, fewer penalties, or other benefits, such as reward points or travel miles.

Q. Cash Advance
Ans: A service provided by many credit card issuers allows cardholders to withdraw a certain amount of cash, either through an ATM or directly from a bank or other financial agency. They typically carry a high-interest rate – even higher than credit card itself – and the interest begins to accrue immediately.

Q. Cash Back
Ans: A cardholder benefit is offered by some credit card companies that pay the cardholder a small percentage of their net expenditures (purchases fewer refunds).

Q. Joint Account
Ans: A bank or brokerage account is shared equally between two or more individuals. This type of account typically allows anyone named on the account to access funds within it.

Q. Authorized User
Ans: A person who has permission to use and/or carry another person’s credit card, but isn’t legally responsible for paying the bill.

Q. Secured Credit Card
Ans: A type of credit card that is backed by a savings account is used as collateral on the credit available with the card. Money is deposited and held in the account backing the card.

Q. Down Payment
Ans: A type of payment made in cash during the onset of the purchase of an expensive good/service. The payment typically represents only a percentage of the full purchase price.

Q. Annual Fee
Ans: A yearly fee that may be charged for having a credit card.

Q. Credit Limit
Ans: The maximum amount that you may charge on your credit account.

Q. Credit Card Agreement
Ans: A contract that outlines the terms and conditions for using your credit card.

Q. Late Payment Fee
Ans: Fee charged when a cardholder does not make the minimum monthly payment by the due date.

Q. Credit Card Statement
Ans: A detailed list of transactions, fees, payments, and balance figures for a credit card.

Q. Introductory APR
Ans: The typically low rate charged during the beginning period after a credit account is opened, after which the regular, typically higher, APR will apply.


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ngpf types of credit Answers Key

Credit is the ability to borrow money from a lending institution, such as a bank or credit union, in order to purchase something or withdraw cash. You can also use credit to get a loan. Credit is granted based on your credit score, which is a measure of how likely you are to repay your debt.

A credit score is a number that represents your creditworthiness – or how likely you are to repay loans. This number is based on information in your credit report, but it isn’t the same thing as your credit history. Your credit history includes all of the accounts where you’ve borrowed.

A high credit score means that you will likely pay back the money you borrow within a certain amount of time and with interest. A low credit score means that it is less likely you will repay your debt, and therefore, people with good credit tend to get better deals on things like car loans and mortgages than those with bad credit do.

The lenders who give out the loans and make the credit decisions are called creditors. They can be individuals or companies.

When you get a loan or buy something on your credit card, it usually means that money has been lent to you and you agree to repay it in part or whole within a certain time period (the ‘term’). The lender can take back their money when this term ends, even if you have not repaid all of the money.

In order to get a loan or credit card, the creditor will look at your ability to repay. This is called your ‘credit worthiness’. It’s usually based on a numerical value assigned by a company to measure how likely you are to repay a debt. This number is your credit score.

The 3 major credit bureaus in the US are Equifax, Experian, & TransUnion. These companies keep track of your credit history, including all of the loans you have taken out and whether or not you have repaid them on time. They also keep track of any bankruptcies or court judgments against you.

Bad credit can be caused by a number of problems, including missing payments or defaulting on a loan, going into debt too many times, not having a big enough deposit to get a mortgage, and too much time with negative information in your file. This type of trouble often leads to high-interest rates on loans from creditors.

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