| A | B |
|---|
| credit history | A formal and extensive record of how good an individual is at maintaining their credit and paying their current and past debts in a timely manner |
| principal | The original amount of money that is loaned or borrowed |
| budget | A formal plan that helps an individual track and control all of their income and expenses over a defined period of time in order to help them generate potential savings |
| diversification | An investment strategy designed to reduce the overall risk of investing by investing in different types of investments that are not likely to move in the same direction at the same time |
| variable rate | An annual interest rate for a credit card that can go up or down depending on whether the financial index goes up or down while the individual has the card |
| credit card | A plastic card that can be used to purchase goods and services or borrow money against a revolving line of credit |
| debit card | A plastic card issued by a bank in which the cost of the items purchased is immediately subtracted from the balance of the individual's checking or savings account electronically |
| fixed rate | An annual interest rate for a credit card that is constant and will not change while the individual has the card |
| term | The number of months that an individual will take to repay a loan |
| consumer loan | A loan made by a bank to an individual so they can purchase high-dollar items such as cars, boats, and RVs |
| interest | The fee charged for the use of money |
| mortgage loan | A long-term loan made by a lender to an individual or business specifically for purchasing real estate or land |
| compounding | The process where the interest that is calculated becomes part of the principal for the next interest calculation |
| time value of money | A financial concept that assumes money deposited in interest-bearing accounts will increase in value with time due to compound interest |
| inflation | A sustained increase in the general level of prices for goods and services in our economy |
| liquidity | A measure of how easily an asset can be converted into cash without significant loss of value |
