Banking Terms
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40 terms
Terms | Definitions |
|---|---|
 Annual Fee | -A yearly fee charged to a costumer to participate in an open-ended credit program |
| Annual Percentage Rate (APR) | -The cost of credit expressed as a yearly rate. APR is a percentage that results from an equation considering the amount financed, the finance charges, and the term of the loan. |
| Adjusted balance | -The balance that remains when all payments made during a billing cycle are subtracted from the previous billing cycle. This balance does not include finance charges for the current billing cycle. |
| ATM | -Acronym for Automated Teller Machine |
| Average Daily Balance | -The balance that results from adding together all the daily balances of a credit account in the billing cycle and dividing by the number of days in the billing cycle. This balance is ofter used to calculated finance charges. |
| Balance | -An outstanding amount of money. In banking, balance refers to the amount of money in a particular account. In credit, balance refers to the amount owed. |
| Balance Transfer | -Repayment of one credit dubt with another credit source. |
| Bank | -An establishment for lending, issuing, borrowing, exchange, and safeguarding money. |
| Bankruptcy | -A legal action taken when a credit holder cannot repay his or her debt. It modifies of eliminates the legal |
| Billing Cycle | The period of time that a credit card statement covers |
| Billing statement- | The summary of all actions applied to a credit account during a billing cycle. These can include payments, purchases, finance charges, fees and other transactions. |
| Cashholder agreement | The written statement that defines and explains all legal terms for a credit card agreement |
| Consumer credit | Credit extended for personal, not business, purposes. |
| Credit | In business, buying or borrowing on the promise to repay at a later date. In any credit arrangement there is a creditor (a person, bank, store, or company to whom money is owed) and a debtor (the person who owes money). In bookkeeping, credit is a sum of money due to an individual or institution. |
| Credit insurance | A cover that pays credit card debt in the event of death, disability or loss of employment. |
| Credit limit | The maximum about of money a borrower can access in a credit account |
| Credit rating | A financial institution's evaluation of whether a person is suitable to receive credit. Credit ratings are based on an individuals character, capacity to repay, and capital. |
| Credit report | A summary of the credit usage of a consumer, including payment histories and current status of all credit accounts. This plays a very large part in the decision to grant credit to a consumer |
| Debit | A bookkeeping term for a sum of money owed by an individual or institution; a charge deducted from an account. |
| Debit card | A banking card enhanced with ATM (automated teller machine) and POS (point-of-sale) features that can be used to purchase goods and services electronically. The card replaces cash or checks. Transaction are deducted from the cardholders' checking aacount either immediately or within one to three days Depending up the type of card, a debit card may require the user to sign his or her name or enter a PIN (personal identification number) into special equipment. |
| Default | A status assigned to a cardholder if he or she fails to perform or conform to all the items listed in the cardholders agreement |
| Fixed rate | An interest rate that do not vary over time. |
| Graced period | The length of time between the use of credit to make a purchase and the start of interest on the amount charged |
| Interest | The fee paid for the use of money. Interest may be paid, for example, by an individual to a bank for credit card use, or by a bank to an individual for holding a savings account. Inter is expressed in terms of annual percentage rate (APR). |
| Introductory rate | A temporarily low interest rate, used as incentive to entice a consumer to sign up for credit. After the introductory period, the rate will increase to the standard percentage. |
| Late payment fee | A fee charged ro a consumer if his or her monthly payment is made after the due date stated on the billing statement. |
| Line of credit | An authorized amount of credit given to an individual, business, or institution. |
| Minimum payment | The smallest payment a consumer can make in a billing cycle to keep the account from going into default. |
| Penalty rate | A higher interest rate imposed on an account when it has lapsed into default. |
| Personal identification number (PIN) | A code that provides security for consumers at an ATM |
| Point of sale (POS) | The store or other location where a transaction takes place. |
| Posting date | The date when a transaction is recognized on your account. |
| Pre-approved | A term used to denote a credit offer that is extended after the creditor has preformed a credit prescreening process |
| Previous balance | The balance that has carried over from the previous billing period. |
| Proprietary credit card | A private labeled credit card typically issued by a department store or petroleum company that can only be used at those specific revolving credit. |
| Secured card | A credit card that is guaranteed by a security deposit so that repayment of the borrowed is assured. This is an option to begin to repair a bad credit history. |
| Revolving line of credit | A credit agreement that allows a consumer to borrow a set amount of money, then after repayment of any portion of that money, the consumer may borrow again up to the original set amount. A credit card is a form of revolving credit. |
| Term | The period of time and the interest rate arranged between creditor and debtor to repay a loan |
| Transaction date | The date a purchase was made or a cash advance was taken. |
| Truth in lending act | A law that required a lender to inform a borrower of the amount financed, total finance charges, annual percentage rate, payment schedule and many more important figures. |
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