Personal Finance flash cards
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21 terms
Terms | Definitions |
|---|---|
 Annual Fee | fee charged by a credit card company for the use of their credit card |
| Annual Percentage Rate | cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan. |
| Adjustable Rate Mortgage (ARM) | home loan secured by a deed of trust or mortgage in which the interest rate will change periodically (i.e. annually); typically adjusted based on a published index such as the Treasury Bill or LIBOR; brought on as a result of high interest rates in early 1980s as a way for banks to transfer the risk of higher interest rates to the consumer. |
| Balloon Mortgage | home loan in which the sum of the monthly payments is insufficient to repay the entire loan; a final payment comes due, which is a lump sum of the remaining principal balance. |
| Credit | Money owed |
| Credit Card | Tool used to finance a purchase |
| Credit Limit | the maximum amount of credit a lender will extend to a customer |
| Debit Card | type of card, often bearing the seal of a major credit card company, issued by a bank and used to make purchases; unlike a credit card, the money comes directly out of a checking account; also called check card |
| Debt Consolidation | act of combining all debts into one montly payment, typically extending the terms and the length of time required to repay the debt. |
| Debt Snowball | preferred method of debt repayment; includes a list of all debts organized from smallest to largest balance; minimum payments are made to all debts except for the smallest, which is attacked with the largest possible payments. |
| Depreciation | a decline in the value of property; the opposite of appreciation. |
| Finance Charge | ... |
| Foreclose | process by which the holder of a mortgage sells the property of a homeowner who has not made interest and/or principal payments on time as stipulated in the mortgage contract |
| Grace Period | time period during which a borrower can pay the full balance of credit due with no finance charges. |
| Home Equity Loan | credit line offered by mortgage lenders that allows a homeowner to borrow money against the equity in their home. |
| Introductory Rate | A temporary interest rate, advertised as a low APR to entice customers to apply for a credit card. After the introductory period, the interest rate will increase to the regular APR. |
| Lease | long-term agreement describing the terms under which property is rented |
| Loan Term | The length of time you have to pay off a loan. |
| Myth | information that has been passed on but is not true. |
| Paradigm | your belief system; the way you see or preceive things. |
| Tax Deduction | an expense that you are allowed to subtract from your adjusted gross income to arrive at your taxable income. |
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