Glossary+(Group+1)

Credit Risk -the possibility of loss if a borrower defaults on a loan.

Debit Card- takes money directly out of your account

Ending Balance - Balance at the end

Finance Charge- Any additional fee added to the original amount of a loan can be called a finance charge. This charge includes the interest added to the balance, service fees for transactions, late fees, and balance transfer

Minimum Payment- The minimum payment is the minimum amount a credit card holder is required to repay each billing period on an open balance.

Prime Rate - The Prime Interest Rate is the interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers)

Principal Balance – is the amount owed on a debt.

Revolving Credit - is a type of credit that does not have a fixed number of payments, in contrast to installment credit.

Terms and Conditions- General and special arrangements, provisions, requirements, rules, specifications, and standards that form an integral part of an agreement or contract.

Contract- the agreement that tells you how long you must keep your card

Credit Card- charge card

Credit Limit- limited amount of money

Credit Report- a report on your credit

Annual Fee- yearly fee

Annual Percentage Rate (APR)- % for the year

Average Daily Balance-An average daily balance is determined by adding each day's balance and then dividing that total by the number of days in a billing cycle.

Balance- Minnimum

Billing Cycle- The time that you are billed at

Fixed Rate Loan- A loan in which the interest rate does not change during the entire term of the loan

Interest Rate- A rate which is charged or paid for the use of money. An interest rate is often expressed as an annual percentage of the principal

Late Fee- A fee charged when a payment is not received on time.

Margin- an amount allowed or available beyond what is actually necessary.

Secured Credit Card- A credit card that a cardholder secures with a savings deposit to ensure payment of the outstanding balance

Cash Advance- getting a higher credit limit

Charge Card- credit card

Collateral- something the bank or company takes away if you are unable to pay back the money borrowed.

Variable Rate Loan- a loan with an interest rate that can change based on the index rate