UGBA 135 FINAL Exam (2026) UPDATE Verified
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Terms in this set (279)
What is "good debt"? Taking out loans in order to pay off a car, a
mortgage or an education or starting a business
What is considered "bad debt"? - Borrowing money to support a lifestyle of living
beyond one's means
What is the definition of a Modern - Financially independent, no government
Day Millionaire? assistance, living the life they want to lead
What is a credit card? - An unsecured line of credit
- based on good faith and credit history
- this is a risk for a bank
What is a debit card? - A secured line of credit
- the bank is taking no risk in issuing one of these
What is a charge card? - Issued by a retailer allowing you to charge
purchases made only with their store
- store credit usually carries high rates or interest
as high as 20 - 30% on unpaid balances
,What is prepaid card? - Offered by banks and non- banks - not linked
to one's bank account
- entails high fees and interest
What is a payday loan? - A high interest short term cash loan that is
intended to be repaid by future paychecks
What is installment debt? - Money that is borrowed to purchase large items
such as a car or furniture paid over time
- borrower purchases the item and pays for it at
regular intervals until the loan is paid back in full
What is a deferred interest plan A plan that enables a consumer to purchase big -
ticket items paying no interest or a low "teaser"
rate of interest over a promotional period.
What are Gift Cards? - Stored value cards, usually for use at a specific
retailer or merchant
What is a cashier's check? - A check purchased by you from a bank, payable
to a third party designated by you.
What is a certified Check? - A personal check the bank guarantees as being
supported by funds in your account
What is credit? The amount of money a lender is willing to lend
subject to repayment terms and conditions such
as interest, fees and penalties
What is Debt? - The state of owing something such as money
What is a Debtor (or borrower)? - A person or entity with debt which owes or has
the obligations to repay the debt
, What is principle? - The amount of money that is borrowed or
loaned
What is interest THE COST OF MONEY
- paid by the borrower to obtain the used of the
principal or received by the lender for providing
the principal - expressed as APR (annual
percentage rate)
What is the Fixed Rate of Interest? - A loan with an interest rate that will remain at a
predetermined or "fixed" rate for the life or term
of the loan - the rate does not fluctuate.
What is an adjustable Rate of - A loan where the rate of interest is not fixed but
interest? may change at various specified times
- most commonly foun din homes where the
interest rate is established for a few years and is
then changed to a new rate for the balance of
the loan
What is the "go - to" rate? - The interest rate you are charged on upaid
credit card balances, in addition to the variable
rate to determine the total rate of interest on
your account
What is revolving credit? - credit or funds made available to you for use at
any time - subject to the terms of repayment -
you can use your credit line over and over again
up to its limit - it revolves
What is the default rate? - an accelerated rate of interest, typically 28 -
35% charged on your credit balance as a penalty
- didn't make minimum payment on due date - or
payment isn't honored by the bank such as a
bounced check
Questions And Answers | With 100% Correct
Answers graded A+ Guaranteed Success!!
Save
Terms in this set (279)
What is "good debt"? Taking out loans in order to pay off a car, a
mortgage or an education or starting a business
What is considered "bad debt"? - Borrowing money to support a lifestyle of living
beyond one's means
What is the definition of a Modern - Financially independent, no government
Day Millionaire? assistance, living the life they want to lead
What is a credit card? - An unsecured line of credit
- based on good faith and credit history
- this is a risk for a bank
What is a debit card? - A secured line of credit
- the bank is taking no risk in issuing one of these
What is a charge card? - Issued by a retailer allowing you to charge
purchases made only with their store
- store credit usually carries high rates or interest
as high as 20 - 30% on unpaid balances
,What is prepaid card? - Offered by banks and non- banks - not linked
to one's bank account
- entails high fees and interest
What is a payday loan? - A high interest short term cash loan that is
intended to be repaid by future paychecks
What is installment debt? - Money that is borrowed to purchase large items
such as a car or furniture paid over time
- borrower purchases the item and pays for it at
regular intervals until the loan is paid back in full
What is a deferred interest plan A plan that enables a consumer to purchase big -
ticket items paying no interest or a low "teaser"
rate of interest over a promotional period.
What are Gift Cards? - Stored value cards, usually for use at a specific
retailer or merchant
What is a cashier's check? - A check purchased by you from a bank, payable
to a third party designated by you.
What is a certified Check? - A personal check the bank guarantees as being
supported by funds in your account
What is credit? The amount of money a lender is willing to lend
subject to repayment terms and conditions such
as interest, fees and penalties
What is Debt? - The state of owing something such as money
What is a Debtor (or borrower)? - A person or entity with debt which owes or has
the obligations to repay the debt
, What is principle? - The amount of money that is borrowed or
loaned
What is interest THE COST OF MONEY
- paid by the borrower to obtain the used of the
principal or received by the lender for providing
the principal - expressed as APR (annual
percentage rate)
What is the Fixed Rate of Interest? - A loan with an interest rate that will remain at a
predetermined or "fixed" rate for the life or term
of the loan - the rate does not fluctuate.
What is an adjustable Rate of - A loan where the rate of interest is not fixed but
interest? may change at various specified times
- most commonly foun din homes where the
interest rate is established for a few years and is
then changed to a new rate for the balance of
the loan
What is the "go - to" rate? - The interest rate you are charged on upaid
credit card balances, in addition to the variable
rate to determine the total rate of interest on
your account
What is revolving credit? - credit or funds made available to you for use at
any time - subject to the terms of repayment -
you can use your credit line over and over again
up to its limit - it revolves
What is the default rate? - an accelerated rate of interest, typically 28 -
35% charged on your credit balance as a penalty
- didn't make minimum payment on due date - or
payment isn't honored by the bank such as a
bounced check
