MoneyU Glossary of Terms


MoneyU Glossary of Terms


Browse the glossary using this index

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Account Balance

The amount of money in your account.

Account Number

Every cardholder's account is identified by an account number. Protect it and never give it out over the telephone unless you initiated the call.

Activate

To prevent fraud, many card issuers require you to call them when you receive your new card in the mail to verify that the correct person has received it. Until proper ownership is confirmed, the card may not be activated.

Adjustable-Rate Loan

Also known as a variable-rate loan, usually charges a lower initial interest rate than a fixed-rate loan. The interest rate fluctuates over the life of the loan based on market conditions, but the loan agreement usually sets maximum and minimum rates. When interest rates rise, generally so do your loan payments; and when interest rates fall, your monthly payments may be lowered.

Adjusted Gross Income

Income less certain deductions and expenses (including those related to education). It is the amount on Line 21 of IRS Form 1040A (or Line 4 on 1040EZ or Line 35 on 1040). This amount is used for several purposes, including eligibility for tax benefits.

Administrator

The person appointed by the court to manage the estate of the decedent.

Advance Fee Loan

A loan calculated so that all finance charges and other creditor expenses are deducted before the consumer receives the principal.

Advertising

An announcementÔÇöusually paidÔÇöof a productÔÇÖs or serviceÔÇÖs benefits that is intended to encourage its purchase.

Affinity Credit Card

A credit card which is sponsored by two or more organizations. For example, the Citi AAdvantage card is sponsored by Citibank and American Airlines.

Age Requirement

To qualify for credit you must be at least 18 years old or have a parent or guardian as a co-signer.

Amortization

To reduce a debt by making payments against the principal balance in installments or regular transfers.

Ancillary Probate

Administration of property that the deceased owned in a different state than the one in which the estate is being administered.

Annual Fee

Some credit card companies charge an annual fee; it is the yearly cost you pay to use the card.

Annual Percentage Rate (APR)

The APR measures the cost of credit expressed as a yearly interest rate.

Annuity

A series of equal periodic payments, such as the interest on a bond.

Application

A form used to apply for credit

Asset

What a person owns, such as cash, stocks, bonds, real estate, savings, or investments, and any personal possessions that can be turned into cash.

Asset Allocation

Diversification of your investments, usually between U.S. and international equities, fixed income, real estate, and commodities.

ATM

Automated Teller Machine. A machine you can use to deposit money, withdraw money, transfer money between multiple accounts, etc. You can find ATMs everywhere these days, including in the lobbies of banks, in grocery stores, inside restaurants, and at sporting events.

Auto Insurance

Provides liability and property damage coverage under specific circumstances.

Automatic Clearing House

The automated clearing house is how electronic transactions are processed when a person selects an electronic debit or credit of funds. These are most common with payroll direct deposit and automatic bill payments.

Automatic Payment

If you have a savings or checking account with the same bank that issues your card, you may be able to automatically transfer money from your bank account to pay a credit card bill. Automatic payment eliminates the risk of paying a bill late and being assessed a late charge.

Available Credit

The unused portion of credit that falls within the consumer's applicable credit limit, if any.

Average Daily Balance

(Including or excluding new purchases.) This is the most common method of calculating interest. To figure out your average daily balance, the bank adds up the amount you owe for each day of your billing cycle and divides that number by the number of days in the billing cycle (see Billing Cycle). New purchases may or may not be added to the balance, depending on the individual card's terms. The most favorable calculation excludes new purchases.

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