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Credit Cards & Credi
Credit Card
| Term | Definition |
|---|---|
| Annual Fee | is a yearly, recurring charge applied by credit card issuers to maintain a credit card account, often covering rewards, perks, or premium services. |
| Annual Percentage | is the total yearly cost of borrowing money, expressed as a percentage that includes both the interest rate and additional fees, such as origination or closing costs. |
| Rate (APR) | is the total yearly cost of borrowing money, expressed as a percentage, which includes both the interest rate and additional fees (such as closing costs or origination fees). |
| Balance Transfers | moves high-interest debt from one or more credit cards to a new card, usually featuring a 0% or low introductory APR for a set period (often 12–21 months). |
| Bankruptcy | is a federal legal process designed to help individuals or businesses eliminate or repay debts they cannot pay. It provides a "fresh start" by discharging most unsecured debts,, stopping creditor harassment, and potentially halting foreclosures |
| Cash Advances | is a short-term, high-interest loan allowing credit card holders to withdraw cash from their credit line via ATMs, bank teller, or convenience checks. It acts as an emergency funding source but incurs immediate interest |
| Co-Signer | is a person, often a friend or family member with good credit, who signs a loan or lease with a primary borrower, agreeing to take full legal responsibility for the debt if the borrower defaults. |
| Courtesy Checks | is a service, typically offered by credit unions, that authorizes payment on a member’s check, ACH, or debit card transaction even if it causes the account to become overdrawn, avoiding returned item fees. |
| Credit Bureau | is a company that collects, compiles, and maintains individual financial data to create credit reports. These agencies, including the "Big Three"—Equifax, Experian, and TransUnion—gather information on borrowing and repayment history |
| Credit Card | A credit card is a physical or virtual payment tool issued by banks or financial institutions that provides a revolving line of credit, allowing users to borrow funds up to a set limit for purchasing goods, services, or obtaining cash advances. |
| Credit History | is a detailed record of an individual's past borrowing and repayment behavior, used by lenders, landlords, and employers to assess financial responsibility. |
| Credit Limit | is the maximum amount of money a lender allows you to borrow on a credit card or line of credit at any given time. |
| Credit Report | is a detailed, 7-10 year record of your financial history, documenting how you manage debt, including credit cards, mortgages, and loans. |
| Credit Score | is a 3-digit number, typically between 300 and 850, that predicts how likely you are to repay debt on time. |
| Debt | an amount of money borrowed by one party (debtor) from another (creditor) that must be repaid over time, typically including interest |
| Finance Charge | is the total cost of borrowing money or using credit, expressed as a dollar amount. It includes interest, service fees, transaction fees, and other costs directly or indirectly imposed by a creditor for extending credit. |
| Grace Period | is a set amount of time after a payment due date—commonly 15 to 30 days—during which a borrower can make a payment, pay a bill, or meet a contractual obligation without incurring late fees, penalties, or interest charges. |
| Interest Rate | is the cost of borrowing money or the reward for saving it, typically expressed as an annual percentage of the principal amount. It represents the percentage of the loan balance paid to a lender for the use of assets, or the return earned on a deposit. |
| Introductory Rate | is a temporary, lower-than-normal interest rate offered to attract customers to financial products like credit cards or loans. These rates often start at 0% for a set period (typically 12–21 months for cards) before reverting to a higher, standard rate. |
| Late Payment Fee | is a financial penalty charged by a creditor, lender, or service provider when a payment is not received by the established due date. These fees compensate for the cost of processing delayed payments |
| Lender | financial institution (like a bank or credit union), or entity that provides funds to a borrower with the expectation of repayment, typically with interest. |
| Line Of Credit | is a flexible, revolving loan providing access to a set amount of funds that can be borrowed, repaid, and borrowed again. |
| Over-The-Limit-Fee | is a charge applied by credit card issuers when your balance exceeds your assigned credit limit, but only if you have explicitly "opted in" to allow over-the-limit transactions. |
| Pre-Approved | having credit, a loan, or an action (like a vendor) vetted and accepted in advance based on a preliminary review of financial information |
| Principle | a fundamental truth, law, or doctrine that serves as a foundation for belief, behavior, or systems |
| Secured Loan | is a type of credit backed by collateral—a valuable asset like a home, car, or savings account—that you pledge to the lender. If you fail to repay the loan, the lender has the legal right to seize that asset to recoup their losses. |
| Term | Financing terms are the specific conditions, rules, and repayment structures attached to a loan or credit agreement between a lender and a borrower. |
Created by:
dbaker26
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