Person Finance: Vocabulary part 2-

Credit Card

A card issued by banks or business, allowing the holder to purchase goods or services on “credit”

Debit Card

Payment card that deducts money directly from your checking.

Prepaid Debit Card

A card you can use to pay for things.

Secured Credit Card

A special type of card that requires a cash deposit usually equal to your credit limit.

Credit Card Debt

Average credit card debt, 6,580.

Credit Limit

The maximum amount of credit that a financial institution or other lender will extend to a debtor.

Interest Rate

Changes with the market.

Fixed Interest Rate

Interest rate is locked in for a period of time.

APR (Annual Interest Rate)

Interest rate for the whole year

Co-signer

Someone who guarantees that if the borrower cannot pay back the loan, they will be legally responsible to pay back the debt.

Credit Report

A credit report is a record of the borrower’s credit history from a number of sources, including banks and credit card companies.

Fico Score

Between 300 and 850, higher scores indicate lower credit risk.

Annual Fee

Charged by a credit card company each year for use of a credit card.

Balance- Transfer

Transfer of all outstanding balance from one credit card to a new card.

Cash Advance

A service provided by most credit card and charge card issues.

Default

Failure to promptly pay interest or principal when due.

Collateral

In lending agreements, collateral is a borrower’s pledge of specific property to a lender.

Minimum payment amount

Minimum amount that you have to pay each month to avoid the late fee for your credit card.

Late Fee

A fee you pay if you make a late payment

Cash Back

A rewards program offered by most credit cards