Purchase money security interest?

What does this legal jargon mean in english on a credit app?
purchase money security interest

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Answers:
From Black's Law dictionary:

'A security interest that is created when a buyer uses the lenders money to make the purchase and immediately gives the lender security ([See the Uniform Commercial Code]); a security interest that is either (1) taken or retained by the seller of the collateral to secure all or part of its price or (2) taken by a person who by making advances or incurring an obligation gives value to enable the debtor to acquire rights in or the use of collateral if that value is in fact so used. *** If a buyer's purchase of a boat, for example, is financed by a bank that loans the amount of the purchase price, the bank's security interest in the boat that secures the loan is a purchase-money security interest...'

Make sense, sort of?

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Its a term which is increasingly used by various companies to protect themselves if you go bankruptcy.

It essentially means that they are claiming a lien on the property that you purchase using their credit card, to the extent of the unpaid balance. Example:

You go to store X. You open a credit account with that store, for $500, and use it to purchase a $400 widget. You don't pay for that widget, and then subsequently file for bankruptcy. The store may try to claim that property as being non-exempt. (In many cases, they won't succeed, because they fail to perfect their security interest).

You don't have the option to opt out of that clause, but as long as you make all your payments on your credit card, there isn't any problem.

For more specific advise on your circumstances, contact an attorney licensed in your state. For a referral, contact your local or state bar association.

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