| Term | Definition |
|---|
| Affinity credit | Credit sponsored by two or more organizations that cooperate to offer credit to members of a group or people who share a common interest; for example, a credit card with a college name on it might be offered to all students and alumni and, based on their credit usage, might produce scholarship funds for the college; also called co-branded credit |
| Amount due | generally, the minimum monthly payment you must make, not the total amount owe |
| Annual fee | the ANNUAL membership fee, if any, of having a credit or charge card |
| Annual Percentage Rate (APR) | the cost of credit for one year expressed as a percentage |
| Available credit | the unused portion of the credit which falls within the consumer's applicable credit limit, if any |
| Average daily balance | the DAILY BALANCES for the month are added, then the total is divided by the number of days in the billing cycle. New purchases may or may not be included, depending on the terms of the credit agreement. This is often the basis for calculating finance charges |
| Billing cycle | the number of days between your last bill and your current bill. Usually 28-31 days |
| Billing statement | your periodic credit card bill, which describes and summarizes all the outstanding balances, purchases, payments, credits, finance charges and other transactions for the month |
| Cash advance | a loan taken out by charging an amount of cash to your credit card. Interest for ________ is usually higher than it is for purchases, and generally there is no grace period, so interest begins accumulating immediately. There can also be a transaction fee for ________ |
| Cardholder agreement | a written contract that sets forth the terms that apply to a credit or charge card account, including the interest rate charged, the method of calculating interest and any annual or transaction fees |
| Charge card | a credit card which requires full payment of the bill each month; no interest is charged. The American Express Card and Diners Club card are examples |
| Collateral | savings, bonds, insurance policies, jewelry, property or other items that are pledged to pay off a loan or other debt if payments are not made according to the contract; also called security |
| Co-sign | to sign a credit agreement with someone and agree to share the debt with that person or assume the debt if the other person defaults and doesn't pay |
| Credit card | a card that allows you to pay a portion or all of the outstanding amount each month, with interest; usually has a credit limit |
| Credit limit | the amount of credit you are authorized to use. If you use more, you can be charged an over-limit fee or your purchase or cash advance request can be rejected. |
| Credit union | a democratically owned and controlled not-for-profit financial cooperative that offers a variety of savings and lending services to members |
| Due date | the day a payment is due to a creditor. After that date, a late fee can be charged and the payment can be recorded as late or the account can be considered delinquent |
| Finance charge | the percentage charge which applied to the daily or monthly balances as described in the credit agreement |
| Fixed interest rate | An interest rate that does not change |
| Grace period | the period of time, generally 20-25 days, from the billing date of your last charge or credit card bill to the due date of your current bill, when you can pay in full without being charged interest. Some cards do not offer a _______. Others only have a ______ if there was no outstanding balance on the account at the start of the billing cycle. Generally there is no ________ for cash advances |
| Installment credit | a credit agreement that allows you to repay credit in regular payments over a specified time |
| Late payment fee | a charge added to an account if a required payment is not received by a specified date |
| Minimum monthly payment | the smallest payment you can make to maintain your account on current status |
| Monthly Periodic Rate | The rate of interest per month, calculated by dividing the Annual Percentage Rate (APR) by 12 |
| Over-limit fee | a charge imposed on some credit accounts for spending more than your credit limit |
| Past due | The status of a bill when the minimum payment has not been received by the due date |
| Periodic rate | The interest rate described in relation to a specific amount of time. For example, the Monthly Periodic Rate is the cost of credit per month; the Daily Periodic Rate is the cost of credit per day |
| Posting date | The date that a purchase, cash advance, fee, service charge or payment is recorded on your charge or credit account |
| Previous balance | the amount you still owe after last month's payments and charges were added to your balance |
| Principal | the amount of money you owe, not including the interest due on it |
| Prime rate | the interest rate banks charge for loans to their biggest and highest-rated customers. Used as a major economic indicator and sometimes as the basis for setting variable interest rates for the consumer credit including credit cards and loans |
| Revolving credit | a credit agreement that allows consumers to pay all or part of the outstanding balance on a loan or credit card. As credit is paid off, it becomes available again to use for another purchase or cash advance |
| Secured credit card or loan | A consumer uses savings or other collateral to guarantee the credit card or loam; the limit of credit is based on the amount of collateral available |
| Transaction fee | an extra charge for various credit activities such as using an ATM or receiving a cash advance |
| Unsecured loan | a loan based on a consumer's promise to pay without savings or other collateral as a guarantee; sometimes called a signature loan |
| Variable interest rate | an interest rate that changes up or down on a set schedule based on an economic index such as the prime rate |
| Zero balance | when the outstanding balance is paid and there are no new charges during a billing cycle |
Combine with other sets
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