Credit and Financial Terms

Available Credit

Credit available for use on a credit account.

Average Daily Balance

Average amount owed each day over a billing cycle.

Balloon Payment

A large lump-sum payment due at the end of a loan.

Billing Cycle

The time interval between billing statements.

Billing Date

The date a credit card statement is generated.

Credit

Trust given to someone to receive goods before paying.

Credit Card

A plastic card used to make purchases on credit.

Credit Card Statement

A summary of account activity, charges, and payments.

Credit Line

The maximum amount of credit a lender extends.

Down Payment

An initial upfront partial payment for a purchase.

Fair Credit Billing Act

Federal law protecting consumers against inaccurate credit billing.

FICO Score

A credit score used by lenders to assess credit risk.

Finance Charge

The total cost of borrowing, including interest and fees.

Impulse Buying

Unplanned purchasing driven by sudden emotional urges.

Late Charge

A fee charged for failing to pay on time.

Minimum Payment

The smallest amount a borrower must pay each month.

Monthly Periodic Rate

The periodic rate applied to an account balance monthly.

New Balance

The total amount owed at the end of a billing cycle.

Payment Due Date

The deadline by which a payment must be made.

Prepayment Penalty

A fee charged for paying off a loan early.

Previous Balance

The amount owed from the previous billing cycle.

Promissory Note

A written promise to repay a specific sum of money.

Truth-In-Lending Act

Federal law requiring transparent disclosure of credit terms.

Wage Assignment

A voluntary agreement to have wages used to pay debts.

Wage Garnishment

A legal order directing an employer to withhold wages for debt.