Credit is Costly Ch4 L4

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Credit Is Costly CHAPTER 4, LESSON 4 DATE DIRECTIONS Use the following key terms and the information on the Sample Disclosure Form to answer the questions. NAMES Key Terms • Annual Fee: the f... ee a credit card company charges for the use of their credit card • Credit Limit: the maximum amount of money the lender is willing to loan to an applicant • Finance Charge: the total cost of using credit including interest and fees • Origination Fee: the charge for setting up a loan (often associated with home loans) • Loan Term: the length of time you have to pay the loan (Remember, the longer the loan, the lower your monthly payment and the greater the interest paid.) • Grace Period: the length of time that the lender charges no interest on money borrowed when you pay off your balance in full each month • Annual Percentage Rate: the cost of the loan each year expressed as a percentage (All lenders are required by law to calculate APR the same way.) • Introductory Rate: lower interest rate offered by credit card companies, usually for a short period of time, to entice you to sign up for credit with them (Eventually, the introductory rate expires and a [Show More]

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