Jeopardy P.F. 5: Credit Cards and Bankruptcy
Category 1 Category 2 Category 3 Category 4 Category 5 Category
100 Category Another term for the borrower of money, goods, etc.... Debtor
200 Category The amount of monetary resources a potential buyer has available (e.g. stock)... capital
300 Category An asset (e.g. car) or piece of property that a person uses when taking out a loan, promising to give that asset to the lender if the borrower defaults on payments.... Collateral
400 Category The lender of money, goods, etc.... Creditor
500 Category This rate shows the total cost of credit annually. It includes interest rates and other costs (e.g. service costs)... APR (Annual Percentage Rate)
Category The price that someone pays for the temporary use of someone else’s funds.... Interest
Category Fraudulent or discriminatory lending practices designed to exploit vulnerable borrowers (e.g. disguised fees for home mortgages)... Predatory lending
Category The original sum invested or loaned is known as the…... principal
Category What are the 3 credit bureaus that compile people’s credit scores?... Trans Union, Equifax, and Experian
Category What does paying more than the minimum payment on credit cards do?... Lower interest rates; lower overall long- term balance
Category Approx. what is the range of credit scores that will lead to lower interest rates?
Category What is the purpose of a credit score?... Show lenders the risk of default according to the person’s credit history
Category Name two entities that check your credit scores?... Banks, credit card companies, employers, landlords, etc.
Category What does it mean for a business to file a Chapter 7 Bankruptcy?... Most severe- they liquidate their assets and go out of business
Category What does it mean for a business to file a Chapter 11 Bankruptcy?... They are holding out hope of staying in business by proposing a financial plan to creditors
Category What does it mean for an individual to file a Chapter 13 Bankruptcy? The debtor adheres to a payment schedule to repay outstanding debts
Category Term for selling a company’s assets, paying outstanding debts, and distributing income to shareholders- then go out of business......Liquidation
Category Approximately how much credit card debt do college students have on average upon graduation?... Over $4,000
Category What do the 3 credit bureaus do?... Compile people’s credit scores
Category Interest paid on both the principal and on accrued interest... Compound Interest
Category Calculated as a percentage of the principal over a certain period; not compounded... Simple Interest
Category What is it called when you miss payments?... Default
Category How, over time, can you build a good credit score?... Pay credit cards on time and in full; pay bills and rent on time; don’t spend over 30% of credit limit; savings or checking account; TIME
Category What can you gain as a result of building a high credit score?... One can receive loans of choice, as well as earn lower interest rates
Category Credit scores are also known as ______ scores (hint: it’s an acronym)... FICO scores
Category /- 1 year, how long (max) can negative credit stay on your record for?... 7 years
Category Name two companies that have filed Chapter 7 Bankruptcy in recent years?... Lehman Bros Bank, Circuit City, Mervyn’s, Sharper Image, Enron, World Com, etc.
Category How long do bankruptcies affect a person’s credit score? years
Category Name at least 3 companies or individuals who have claimed Chapter 11 bankruptcy... PG&E, U.S. Airways, Donald Trump, Abe Lincoln, Henry Ford, Michael Vick, GM, Chrysler, Walt Disney, etc.
Category /- $100 billion, what is the current (2012) total credit card debt in the United States?... $858 billion