MoneyU Glossary of Terms


MoneyU Glossary of Terms


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CREDIT

Daily Periodic Rate

The daily periodic rate is your annual interest rate expressed on a daily basis. It equals 1/365th of your annual percentage rate.

Debit Card

This card allows you to deduct the amount of your purchase directly from your checking account for payment to the merchant.

Default

Failure to pay a debt as outlined in the cardholder agreement, bankruptcy, or an inability or unwillingness to pay your debt. If you default on your credit card account, the issuer cancels your account and demands full payment of the outstanding balance

Dispute

To question the accuracy of information on a credit report. Disputes can now be effectively resolved online by notifying Equifax.

Equal Credit Opportunity Act

The Equal Credit Opportunity Act requires that U.S. financial institutions and other creditors make credit equally available to all creditworthy customers without regard to race, color, religion, national origin, sex, marital status or age. For example, a creditor cannot ask you to reapply, close your account or change terms of a loan if you become widowed or divorced. Income from pensions, annuities or part-time employment may not be excluded by a creditor in evaluating a consumer's creditworthiness.

Fair Credit Reporting Act

The U.S. Fair Credit Reporting Act seeks to achieve fair, timely and accurate reporting of credit information by regulating the activities of credit bureaus, limiting access to credit bureau information, and requiring that creditors disclose certain information regarding their use of credit bureau or third-party information. Under the Fair Credit Reporting Act, you have the right to see the credit history maintained by a credit bureau about you (see Credit Report).

Finance Charge

The cost of consumer credit expressed as a dollar amount. A finance charge would include the following types of charges imposed by card issuers: interest, transaction fees, and service fees.

Grace Period

The period of time, generally 20 to 25 days, from the billing date of your last credit card bill to the due date of your current bill, when you can pay in full without being charged interest. Some cards do not offer a grace period. Others only have a grace period if there was no outstanding balance on the account at the start of the billing cycle. Generally, there is no grace period for cash advances.

Installment Credit

A credit agreement that allows you to repay credit in regular payments over a specified time.

Interest

A charge for borrowed money, generally a percentage of the amount owed.

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