Unit 3 Economics and Personal Finance

Annual Fee -  A yearly fee that may be charged for having a specific credit card, independent of how you use the card
ATM - Allows a person to manage a bank account holder’s funds through actions such as withdrawing or depositing money, viewing account balances, etc. 

APR - The cost you pay each year to borrow money, including fees, expressed as a percentage

Bank Statement - A monthly document prepared by your financial institution which shows all the transactions related to your account

Bankruptcy - A legal proceeding carried out to allow individuals or businesses freedom from their debts, while simultaneously providing creditors an opportunity for repayment

Certificate of Deposit (CD) - A bank product that earns interest on a lump-sum deposit that’s untouched for a predetermined period of time

Check - A written, dated, and signed order to the bank that tells it to pay a definite sum of money to a payee

Checking Account - A bank account that allows you to easily access your funds for daily sue through checks or debit cards. It’s a primary tool for managing your finances and making payments. 

Collateral - Something valuable that the lender can take as payment if you can’t or don’t repay your secured loan

Compound Interest - Reinvesting earned interest back into the principal, so that interest is calculated on both the initial amount and the accumulated interest

Credit Bureau - A consumer-reporting company that collects and sells information about how individual people manage their credit

Credit Card - A card that allows the holder to make purchases without cash by borrowing money

Credit History - A record of a person’s use of credit over time; 15% of your credit score is based on the length of your credit history

Credit Limit - The maximum amount that may be borrowed on a credit card

Credit Score - A 3-digit number (ranging from 300-850) based on an individual’s credit history detailed in a credit report

Debit Card - A card that is directly connected to your checking account; it enables you to conduct ATM transactions and to make purchases instead of using cash or writing a check

Debt Avalanche Method -  A method of debt repayment whereby the borrower prioritizes paying off debts with the highest interest rates first

Debt Snowball Method - A method of debt repayment whereby the borrower prioritizes paying off debts with the smallest balances first

Direct Deposit - an automatic electronic deposit of net pay to an employee’s designated bank account

Emergency Fund - Money set aside for unanticipated expenses or loss of income

FDIC Insurance - Protection provided by the FDIC; protects the deposit of customers against loss up to $250,000 per account

Hard Inquiry - An inquiry into your credit history, typically in advance of applying for a loan. Hard inquiries can negatively affect your credit for 12 months and remain on your credit history for two years

Maintenance Fee - A monthly fee that some banks charge to provide access to checking or savings accounts

Minimum Balance - A certain amount of money that must be kept in an account as required by that particular financial institution

Minimum Payment - The smallest amount of credit card bill that a credit card holder must pay during a billing cycle to remain in good standing with the lender

Money Market Account - A type of savings account that may allow debit card and check writing privileges

Savings Account - A type of deposit account provided by banks and financial institutions; allows interest to be earned on the deposited amount

Overdraft Protection - A loan banks offer to their customers when they try to withdraw more funds than they have in their account, usually for a fee and with interest

Payday Loan - A small loan, offered through a business, lent at a high interest rate, and meant to be paid as soon as you receive your next paycheck

Soft Inquiry - An inquiry into your credit history as part of a background check. This doesn’t affect your credit score

Schumer Box - A standard table that legally must appear in a credit card agreement showing basic information about the card’s rates and fees

Simple Interest - Interest paid on the principal alone

Thin File - A term used to describe someone with little to no credit history

Unusual Activity Alert - A notification that lets you know when there is suspicious activity with your account