Financial Literacy

Loan

an agreement where you are credited with a fixed amount of money.

Amortization

paying off debt over time in equal installation, part of each payment goes toward principal interest.

Term

the length of time you can pay an asset or loan.

Principal

the original amount of money borrowed, separate from interest.

Secured debt

debt tied to some tangible asset that can be used as collateral and repossessed if payment is not made.

Annual fee

a yearly fee that may be charged for having a specific credit card.

Revolving credit

open line of credit that can be used for any purchases as long as you are under limit, payments vary.

Balance transfer

moving debt from one credit card to another.

Cosigner

a person who agrees legally to sign a loan/credit alongside a primary borrower.

Credit limit

the maximum amount of money you can borrow on a credit card.

Installation loan

loan used to finance a specific purchase for a specific amount of time payment the same amount monthly.

Minimum payment

smallest amount of credit card bill that a credit card holder must pay during a billing cycle to remain in good standings with the lender. (CREDIT)

Unsecured debt

debt not tied to a specific asset, difficult, or impossible for a lender to repossess items if payments are not made.

Down payment

partial payment made in cash at the beginning of the purchases, balance due later or is financed as part of a loan.

Interest

amount you owe as the cost of borrowing money.

Charged card

a special type of credit card with no interest because you must pay it in full each month.

Credit card

card that allowed you to make purchases now with borrowed money, must repay lender in one lump sum or in monthly payment with interest.

Mortgage loan

loan used to buy real estate without paying the entire value for the purchase up front.

Fixed vs adjustable rate

interest rate that does not change vs fixed for a specific amount of time but then changes usually every month.

Interest rate

the rate charged for borrowing money usually expressed as a percent.

Default

failure to repay a loan according to the terms agreed to.

Grace period

number of days between a borrower's statement date and when payment is due, often without occurring interest.

Schumer box

standard table that legally must appear in a credit card agreement showing basic info about the cards rates and fee.

Introductory APR

typically low rate charged during introductory period after an account is opened, rate will then go up.

Penalty APR

a high interest rate triggered by being late with or missed a credit card payment.