Credit Basics
Transaction
Actual process of a purchase, whether it involves payment with cash or credit card or depositing or withdrawing money from an ATM.
Annual Percentage Rate (APR)
Annual rate charged for borrowing.
Hot Check
Check written on funds not actually in the checking account.
Authorization Code
Code which is sent from the credit card to the merchant who submitted the transaction as a form of its approval.
Liability
Debt which is your responsibility to pay.
Refund
Give back, especially money; return or repay, normally for the purchase price of a returned item.
Secured
Guaranteed by collateral.
Unsecured
Guaranteed only by a signature.
Hologram
Holograph; three-dimensional image of an object formed by a split laser beam, then illuminated either with a laser or ordinary light.
Finance Charge
Interest charged for charged made on a credit card or other type of loan.
Discount Rate
Interest rate charged by federal reserve banks on loan to their member banks.
Character
Involves paying bills on time.
Credit Limit
Maximum amount of money available to a credit cardholder for purchases on a single credit card.
Prime Rate
Minimum interest rate charged by a commercial bank on short-term loans to large, best-rates customers.
Consumer
Person who acquires goods or services for direct use or ownership, usually through purchasing with money.
Creditor
Person who has loaned money to someone on credit or through a loan.
Capacity
Personal income or earnings.
Collateral
Property accepted as security for a loan or other obligation.
Billing Cycle
Schedule of recurrent times in any regular systems of paying or sending bills.
Enticement
Something which attracts, especially with the promise of pleasure or rewards.
Merchant
Store or store owner.
Capital
Things one owns, for example, a car.
Capture
To enter data of a purchase into a credit card electronic system for processing and ultimate approval or decline.
Reconcile
To settle or resolve any differences between two sets of bookkeeping.
Federal Reserve Banks
Twelve regional banks which monitor and act as depositories for banks in a specific region.
Security Code
three- or four-digit code on the front or back of a credit or debit card which is an additional layer of security the merchant can use to verify the person using the card is the cardholder.