Credit

Usury

Charging interest on a loan, especially charging illegally high or excessive interest

APR (Annual Percentage Rate)

The annual cost of credit expressed as a percentage of the amount borrowed. Includes interest rates, fees, and other costs.

Due date

The date a payment must be received or a late fee will be charged

Balance owed

The total amount of money owed to a third party such as a credit card company, utility company, mortgage banker or other type of lender or creditor.

Prepayment

The unscheduled partial or complete payment of the principal amount outstanding on a mortgage or other debt before it is due. This can help reduce the long-term cost of the loan.

Ownership

When a person "has title" on a car or house.

Credit card companies

bank or business that allows somebody to purchase goods and services and pay for them later, often with interest

Debtors anonymous

A 12 step program for those in copious amounts of debt to break free of their debt and solve their financial problems.

Garnishment

A court ruling that requires that money be deducted from a person's paycheck involuntarily in order to pay a debt.

Secured Credit card

A credit card that requires you to promise collateral to receive credit.

Credit score

A credit score is a numerical rating provided on a credit report that establishes creditworthiness based upon a person's past credit/payment history and their current credit standing.

Identity theft

A crime that involves someone pretending to be another person in order to steal money or obtain benefits

Finance charge

A fee for borrowing money, added to a monthly credit card bill.

Bankruptcy

A legal process to get out of debt when you can no longer make all your required payments

Home equity loans

A lone based on the difference between the current market value of a home and the amount of borrower owes on the mortgage

Mortgage broker

A person who brings together the user of capital (borrower) and the supplier of capital (lender). For this service, a finder's fee is usually paid by the borrower.

Credit history

A record of a consumer's ability to repay debts and demonstrated responsibility in repaying debts

Pawn ticket

A ticket issued by a pawnbroker in exchange for an article pawned, bearing details of the loan.

Grace period

A time period during which no finance charges will be added to your account

Promotional Rate

An interest rate charged to a customer during the early stages of a loan; the rate often foes up after a specified period of time

Variable rate

An interest rate that changes at the discretion of the credit card company or lender

Predatory lending

Any of a number of fraudulent, deceptive, discriminatory, or unfavorable lending practices. Many of these practices are illegal, while others are legal but not in the best interest of the borrowers.

Truth in Lending Act of 1968

Banks are required by law to fully disclose the interest and all finance charges that will be incurred on any particular loan what is know as the Annual Percentage Rate (APR).

3 C's of credit

Criteria used to determine your credit score. Character: From your credit history, a lender may decide whether you possess the honesty and reliability to repay a debt. Capacity: This refers to your ability to repay the debt. The lender will look to see if you have been working regularly in an occupation that is likely to provide enough income to support your credit use. Capital: A lender will want to know if you have valuable assets such as real estate, personal property, investments, or savings with which to repay debt if income is unavailable.

Minimum amount due

If the consumer makes the minimum payment, interest charges continue to accrue on all outstanding balances.

Title for goods

Legally established ownership to property.

Foreclosure

Occurs when a lender takes a person's home because of the individual's inability to pay their mortgage.

Collateral

Property pledged to back a loan

Consumer Credit Counseling Services

Services offered by organizations that help consumers find a way to repay debts through careful budgeting and management of funds.

Charge cards

a card used for making payments; balance must be paid in full when the statement is received

Low credit rating

a credit rating around 500 or lower is high enough risk that many lenders will refuse a line of credit, and those that do grant one will penalize the borrower with high interest rates and difficult terms.

Payday loans

a loan where a borrower gets a cash advanced based on his paycheck. These loans generally must be repaid on the next payday. They often aim to trap the borrower in debt.

Credit rating

a measure of your creditworthiness, often computed as a numerical score, using the FICO scoring system to analyze your credit history

Line of credit

a pre-established amount that can be borrowed on demand with no collateral

Chapter 7 Bankruptcy

a proceeding designed to sell off a debtor's property, pay off creditors, and relieve the debtor from most debts. Also called liquidation and straight bankruptcy.

Chapter 13 Bankruptcy

a reorganization form of bankruptcy for individuals that allows the debtors to keep their property and use their income to pay a portion of their debts over three to five years

Credit report

a report on a person's creditworthiness that includes identifying information, credit cards, late payments, bankruptcies, and savings balances

Mortgage

a specific type of loan that is used to buy real estate

Revolving credit

a type of open credit agreement that allows consumers to pay all or part of the outstanding balance on a loan or credit card.

Variable interest

an interest rate that moves up and down based on the changes of an underlying interest rate index

Pawn shops

charge very high interest for loans based on the value of tangible assets (such as jewelry or other valuable items)

Consumer debt

common forms of debt by consumers; credit card debt, payday loans, auto loans

Credit reporting agency

equifax, transunion, and experian keep a record of consumer's credit transactions

Default

failure to pay back a loan

Auto finance companies

financial organization that specializes in automobile loans to consumers

Fixed interest rate

interest rate that does not change from month to month

Secured loans

loans backed by collateral that the bank can claim if the borrowers do not repay them

Unsecured loans

loans that require a good credit rating but no collateral

Cash advances

money lent: a loan given in cash, especially by an employer or credit card company, in anticipation of the borrower's being able to repay it

Consolidation loans

one large loan made to consumers to pay several debts at once

Lien

right to possess and sell the property of a debtor

Liquidation

selling for cash

Co-signed loans

signing for another person's debt for loans which involves a legal obligation made by the cosigner to make payment on the other person's debt should that person default. Having a cosigner is way for individuals with a low income or poor/limited credit history to obtain a loan.

Repossession

taking away property due to failure to repay the debt

Credit limit

the maximum amount that you may charge on your credit account

Late fee

the result of the credit card company not receiving and posting the payment on the due date

Installment debt

type of loan repaid with equal payments, or installments, over a specific period of time

Tax preparers

use their knowledge of federal, state, and local tax codes and publications to prepare tax returns and make sure that their clients do not pay unnecessary taxes.