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79 Cards in this Set
- Front
- Back
Act limiting liability if credit card is lost or stolen
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Consumer Protection Act
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Allows the purchase of goods and services when cost is too great for current resources
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Credit Card
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3 Kinds of goods and services for which credit should not be used
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Daily expenses, nondurable, short lived
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3 things lender considers concerning creditworthiness
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present earnings, net worth, credit history
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Maximum percentage (excluding mortgage) of income to be used in paying off debt
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20%
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Form of credit issued to consumer in advance of transaction
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Open Credit
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Account not involving charge card
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30 day charge account
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3 types of revolving credit
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overdraft protection, unsecured personal, and home equity
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Act making discrimination in credit illegal
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Equal Credit Act
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3 parts of Truth in Lending
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APR, payment, fees
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Gives option to return unsatisfactory goods and services purchased on account
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Fair Credit Billing Act
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two kinds of bankruptcy
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chap 13, chap 7
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Cash Advances
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Bank (Credit) Cards
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two cycle
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more interest
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highest interest
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bank cards
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2 most common bank credit fees
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annual and transaction
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2 most common types of loans
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single payment and installment
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half of all consumer loans
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auto
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helps overextended credit
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consolidated loan
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single payment maturity period
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1 year
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only tax deductible consumer loan interest
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home equity, student
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lowest interest rates
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commercial banks
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unsecured, high risk loans
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consumer finance corporations
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sales finance company
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buys installment contracts from businesses and sells them to purchasers
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GeCC
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Captive finance company
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3 most important features of a loan contract
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collateral, maturity, repayment
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chattel mortgage
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gives lender title to collateral in case of default
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collateral note
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agreement allowing lenders to sell collateral in case of default
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prepayment clause
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obligates borrower to pay interest in case of early repayment
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loan rollover
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extends maturity on single payment loans
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simple method interest
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most common, lower APR
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discount interest
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least common, higher APR
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Installment purchase contract components
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sales contract, security agreement, note, insurance agreement
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credit life insurance
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insures lender against death of borrower
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acceleration clause
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allows lender to demand full payment at any given time, rarely used
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rule of 78
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determines monthly interest charges
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borrow
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if savings earnings are higher than cost of borrowing
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paid up whole life
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payments end at predetermined period
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continuous premium whole life
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payments conitnue til death
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life insurance that doesn't contribute to building an estate
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term
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flexible
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universal
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life sold in conjunction with installment loans
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variable
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clause that stipulates how funds are distributed to beneficiary
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settlement clause
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nonforfeiture clause
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provides whole policyholder with some benefits when a policy is terminated before its maturity
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advantages to life insurance for savings
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safety of principle, competitive return, liquidity, forced savings
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life insurance proceeds
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not subject to income tax
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no risk tolerance or self control
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whole
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solid but inexpensive
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term
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tax shelter, stock market, high risk
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variable
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flexibility, savings
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universal
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reasons for rising costs of health care
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poor distribution of facilities and services, administrative and technology costs
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health care insurance
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pays most health care expenses
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major medical plans
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large deductible
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3 clauses of health insurance policies
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deductible, co-pay, waiting period
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coordination of benefits
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no multiple providers
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deductible
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reduces chance of fake illness
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health insurance deductibles
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cummulitve
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COBRA
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pay to keep benefits after losing job
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Government financial aid
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Social Security, Worker's comp
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Medicare part A
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basic hospital
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Medicare part B
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Supplemental medical insurance
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Medicare coverage age
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65
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Group of doctors in central location
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HMO
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network of physicians and hospitals
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PPO
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Reducing risk through assumption of loss
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Co-pay, internal limits, maximum aggregate limits
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resources
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needs
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5 Cs of Credit
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1) character
2) collateral 3) capacity 4) capital 5) condition |
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Benefits of life insurance
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financial protection for dependants, protection from creditors, tax benefits, vehicle for savings
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needs analysis method
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balances obligations and resources
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guaranteed purchase option
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ability to purchase coverage without further proof of insurability
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indemnity
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fee for service
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Blue Cross/Blue Shield
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prepaid med. expense plan w/ participating hostpitals
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Medicare
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Social security, over 65, disabled
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Medicaid
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unable to pay for insurance
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subrogation
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insurance company comes after liable party on behalf of insured
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personal property floater (itemization)
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covers property not covered by homeowners
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10/20/10
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#individual passengers/bodily injury per accident/ property damage per accident
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long term care, disability
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covers loss of income but very expensive
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Insurance
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reduces risk and transfers loss
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