- Credit Card
- A type of payment card that allows consumers to purchase goods and services on credit. It is issued by a financial institution such as a bank or credit union, and can be used to make purchases in person or online.
- Credit Limit
- The maximum amount of money that a consumer can borrow on their credit card. This may also be called the “credit line” or “line of credit”.
- Consumer Debt
- Consumer debt includes any debt incurred for non-business related purchases such as credit cards, medical bills, installment loans, and other consumer spending. High levels of consumer debt can lead to difficulty in making payments and delinquency or default on loans.
- Debt Consolidation Loan
- A debt consolidation loan is when multiple debts are grouped into one larger loan that has hopefully a lower interest rate and more manageable payment than multiple smaller ones.
- Payday Loans
- Payday loans are short term loans with extremely high interest rates given out with minimal restrictions; these types of loans are considered very predatory due to their costliness and should be avoided unless absolutely necessary.
- Credit Score
- A numerical representation of an individual's creditworthiness, based on their past borrowing and repayment history. Generally, the higher the score, the more likely it is that a consumer will be approved for loans and other forms of credit.
- Annual Percentage Rate (APR)
- Average annual cost of borrowing money, including interest charges and fees associated with a particular credit card or loan product expressed as a single percentage number.
- Balance Transfer Fees
- A fee charged when transferring balances from one credit card to another (i.e., when consolidating debt). This often comes in addition to applicable interest rates; however, some cards offer zero-percent balance transfer offers with no fees at all if done within a certain time period after approval/activation of the new account.
- Cash Advance Fees
- A fee charged when withdrawing cash from an ATM using your credit card instead of your bank account or debit card—typically 2-5% of the transaction amount, plus any applicable ATM fees from the receiving institution itself (the ATM owner).
- Late Payment Fees
- A fee charged by lenders for late payments on your account balance—typically $25-35 per missed payment depending on issuer policy and/or outstanding balance amount/activity since last statement date(s). The amount of time before a late payment fee is called the grace period, which is typically 25-30 days after the close of the billing cycle.
- Minimum Payment Due
- The smallest dollar amount that must be paid each month on your loan or credit card debt in order to avoid additional late payment penalties and keep your account current with respect to borrower obligations outlined in terms & conditions documents at time account was opened/activated/approved by lender/issuer respectively.
- Credit Utilization Ratio
- A ratio used to measure how much of your available credit you are utilizing at any given time; lower ratios indicate better overall management of debt while higher ratios may trigger warnings or higher interest rates from lenders/issuers in some circumstances.
