| A | B |
|---|
| 30-day accounts | accounts where borrower has to pay back the full amount borrowed each month |
| Account disclosure statement | a statement by a creditor that details all of the fees and how interest is calculated on a credit account |
| Annual fees | A yearly charge for the privilege of carrying and using a particular credit card, or other service |
| APR | This is the amount of interest a borrower will be charged on credit each year |
| Cash advance | money borrowed on a credit card account, usually associated with higher interest rates |
| Closed-end credit | a loan for a specific amount that must be paid in full, plus interest, by a certain date |
| Compound interest | Interest that is paid on the amount owed and on interest previously accrued on the debt |
| Credit | the concept of buying now and paying later for goods and services |
| Credit card | A type of revolving credit where the borrower uses a card to purchase items or borrow money up to a designated credit limit and pay the loan back over time |
| Credit Line/limit | The maximum amount that a person can borrow on a credit account |
| Creditor | financial institution, merchant or individual who lends money |
| Debt | an amount owed to a lender |
| Finance charge | How much someone pays the lender for the use of credit; usually in interest payments and other fees |
| Finance company | a small loan company that specializes in lending to people who have no credit or bad credit |
| Float/deferred payment | one benefit of using credit where a borrower can begin using the item purchased and pay for it at a later time |
| Installment plan | A plan to purchase a specific item with a set number of payments and a set interest rate |
| Interest - credit | The price paid for the use of credit, usually stated in a percentage |
| Layaway | a type of credit where a borrower puts down a small amount and the lender holds the merchandise until the borrower makes regular payments and pays off the merchandise |
| Loan | money borrowed from a lender |
| Loan term | specified length of time for paying off a credit account |
| Minimum payment | The smallest amount that a borrower can pay on an amount owed, usually associated with credit cards |
| Open-end credit | an agreement with a lender to borrow up to a maximum amount and to keep borrowing up to the maximum amount whenever credit is available |
| Origination fee | an amount charged for setting up a loan, usually associated with home loans |
| Pawn shop/broker | businesses that give high-interest loans based on the value of personal posessions. They hold the items until the loan is paid or will sell the item if not paid in specified amount of time |
| Payday Loan | A high interest loan where money is borrowed against a future paycheck |
| Penalty fees | Amounts charged for late payments, early repayment of loans, exceeding credit limits, etc. |
| Prime rate | The best rate offered by a lender. The basis of calculating rates for mortgages, credit cards and other variable, short-term loans |
| Principal | The original amount borrowed |
| Promotional incentives | Rewards offered by creditors to get borrowers to apply for credit with them |
| Revolving account | accounts that allow the borrower to charge up to the limit, pay some, and continue to charge without a set ending time period |
| Secured loan | loan that requires security in the form of collateral that can be taken if the borrower is unable to pay |
| Service credit | an agreement to have a service performed now and pay for it later |
| Simple Interest | Interest calculated only on the amount borrowed without compounding interest |
| Title loan | a high interest loan based on the ownership of a vehicle where the title (official document) is pledged as security for the loan |
| Unsecured loan | loans made without the borrower offering any specific assets as security for the loan with lending based solely on the borrower's credit rating |
| Variable rate | an interest rate that may change over a period of time |
| Grace period | the time between the date a customer is billed and the date the payment is due when no interest is charged |
| balance | the current amount owed on a debt |
| billing cycle | the length of time between billings on an account; usually 25 to 30 days |
| billing statement | a document that a borrower receives, usually monthly, which details all activity on a credit account during the billing cycle |
