Annual fee - A yearly charge for the use of a credit card, on average can range $50 to $200, billed directly to the customer's monthly statement.
Authorized user - A person who has permission to use your credit card account. For example, a secondary user on your account.
Average daily balance - A common way credit cards companies calculate your payment due. Average daily balance is calculated by adding each day's balance and then dividing that total by the number of days in a billing cycle.
Annual percentage rate (APR) - It is the annual rate of interest inclusive of fees and costs paid to get the loan. APR is determined by taking the average compound interest rate over the term of the loan.
Additional principal payment - You can pay extra towards your loan in order to pay it off faster, overtime you save a lot in loan interest.
Billing cycle - The days between the current statement date and the last statement date.
Billing statement - Your monthly bill that includes a summary of activity on your account, including purchases, payments, balances, credits, and finance charges.
Charge-off - When credit card companies “write off” non-performing debt or uncollectable debt.
Co-signer - A person who also signs the loan documents and is responsible for the debt if the primary borrower reneges on the debt.
Consumer Credit Counseling Service - A service that provides consumers counseling on
credit debt management and debt repayment. The aim is to pay off your debts completely in the shortest time.
Consumer credit - Loans that are not secured by assets, commonly known as unsecured loans.
Consumer debts - Personal debt, not related to business debt.
Credit - Funds provided by a creditor to a borrower on condition of repayment over a certain period. Generally, contains interest.
Credit bureau -Private companies that collect and sell your personal information about your credit. They issue credit reports that list how you make payments and manage debts, the untapped credit you have available, and any loans you have applied for. The reports are made available to individuals and to companies that want to do credit checks or for solicitation of business. The three major national credit bureaus are Trans Union, Experian, and Equifax.
Credit history - A record of your debt payments.
Credit insurance - An insurance policy that pays off your card debt in case you lose your job, become disabled, or die.
Credit limit - The maximum amount a creditor will lend you on your credit card account.
Credit rating - A quantified measure of your ability to repay debts, based on income and history of payment of past debts. It is usually expressed as a number called a credit score.
Credit report - A report issued by credit bureaus containing information about your debt history related to your borrowing habits. A credit report is used by creditors and lenders to approve a loan, set the loan terms, or approve your credit card. A good credit report can get you a lower interest rate compared with an average or bad credit score.
Credit score - Your credit history is quantified as a number between 300 and 800+. The best credit score is above700. Typically,
credit repair is used if you have bad credit and are looking to increase your credit score.
Creditor - Person or company that lends you money.
Debt - Funds owed to a person or company.
Debt consolidation - Combines all outstanding loans into one single loan, usually with a lower repayment schedule.
Debt-to-income ratio - The percentage of before-tax earnings that is used to pay loan obligations, such as student loans, auto loans, and
credit card debt. This is used by a lender to assess approval of loan and interest rate on the loan.
Debtor - Officially, a person who has filed a petition for relief under the bankruptcy laws. More generally, anyone who owes monies creditors.
Default - When you fail to fulfill your obligations as set out in the loan, credit or lease terms.
Fair-Share - A creditors’ voluntary contribution.
Fair Credit Reporting Act - A law that governs credit bureaus and their reporting methods. It outlines actions for remedying errors in your credit report. Also, requires by law, credit bureaus to provide consumers with credit reports at their request.
Fair Debt Collection Practices Act - Law that prohibits certain manners of debt collection, such as harassment.
Equal Credit Opportunity Act - Law prohibiting discrimination in credit transactions based on the basis of race, religion, color, sex, national origin, marital status, age, source of income or the exercise of any right under the Consumer Credit Protection Act.
Finance charge - The charge for using a credit card, made up of interest and other fees.
Grace period - The grace period is the time you have before the card company starts charging you interest on your new purchases - usually a period of 20 to 30 days.
Introductory (or intro) rate - The initial low rate charged by a lender or credit card company to solicit your business. This is a teaser rate.
Late fee- A fee charged by a creditor for late payment of bill due.
Minimum payment - The minimum amount a cardholder must pay to maintain your account from going into default.
Monthly periodic rate - An interest rate factor used in calculating interest charges on a monthly basis.
Over-limit fee- A fee charged by credit card companies to your account for a balance that exceeds your credit limit.
Past due fee - A fee charged by the credit card companies when your account is past due.
Power of attorney - A legal document which authorizes someone you trust to conduct business on your behalf.
Principal - The amount of money borrowed and owed, excludes interest.
Re-age -A technique used to clean up your credit history. Basically, your account is no longer considered past due because the creditor re-labels your account “current.”
Rate - Simply, the interest rate percentage you pay for the use of creditors’ money.
Revolving line of credit - Lets you keep borrowing money from a credit card company once it has been repaid.
Secured card - A credit card secured against a bank checking or savings account that ensures timely payments of any outstanding balance. Mainly used by people new to credit or people attempting to rebuild credit.
Secured loan - Loan backed by collateral.
Unsecured debt - Debt that is backed by any pledge of collateral. Majority of credit cards are unsecured debt.
Unsecured loan - A loan not secured by collateral.