finance

overdraft fees

$35

U.S. Savings Bonds

A form of government debt issued to American citizens to help fund federal expenses.

Beneficiary

A person named to receive the benefits from an insurance policy

Money Market Account

A savings account that requires a minimum balance and earns interest that varies from month and month (the rate fluctuates based on the current market rate)

Certificate of Deposit (CD)

Alternative to savings account-money is left on deposit for a stated period of time to earn a specific (higher) rate of return.

5 C's of Credit

Character, Capacity, Capital, Collateral, Conditions

Internal Limits

Limits sets specific levels of repayment for certain services

commercial bank

Owned by investors They are in the business to make money

credit union

Owned by members May not have branches near you if you were to move

Tips for Using Credit Cards

Signed newly issued cards immediately carry only the cards you need Notify creditors immediately when a card is stolen or lost destroy (cut) expired cards Don't give credit card numbers and expiration dates by phone to people of businesses you don't know Make sure you don't give out credit card information over the internet if the site you are on is not a secure site - check for

Rate of Return

The % of increase in the value of your savings from earned interest. Rate of Return=total interest earned/original deposit

Annual Percentage Yield (APY)

The amount of interest a deposit earns after compounding for 1 year

Paying yourself first

The concept of setting aside a portion of your income for savings before spending any of it

Mutual Fund

Traded only once a day Can set up automatic payments of withdrawal Flat dollar amount

ETF

Traded throughout the day Can't make automatic investments or withdrawals Price of one share

bond

You lend money to the government or a company, and they agree to pay you back with interest.

Installment loan

a loan repaid with interest in equal periodic payments

Secured Loan

a loan where the borrower pledges property to assure payment

Layaway

a plan where merchandise is set aside in a customer's name until it is paid for

PMI

a policy that protects the lender in case the buyer cannot make payments.

Line of credit

a pre-established amount of money that can be borrowed on demand DISADVANTAGES future money tied up

Tax Savings

able to deduct interest charges on mortgage payments and property taxes from your federal tax return

Creditor

business or person that you're borrowing the credit from

Equity

difference between the value of your home and what you owe on it

Subsidized Loan

do not need to be paid back until 6-9 months after graduation (as long as you're enrolled in school part time) eligibility depends on income level and school costs interest occurs after graduation can only borrow a specific amount

There are 3 major US credit bureaus:

equifax experian transunion

Industry

group of companies that make the same products

Sector

group of stocks, often in one industry; Pharma companies are part of health care sector

part a part b

hospital medical

Home equity loan

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

Unsubsidized Loan

low, fixed interest rate interest accrues day 1 of disbursement can only borrow a specific amount anyone can apply

Assigned Benefits

nsurance company makes direct payments to the doctor/hospital.

Finance Charge

pay for the use of a credit card ex.interest charge

Deferred billing

purchases are not billed to the customer until a later date

sources of credit

retail stores, finance companies, loan sharks, usury laws, pawnshops

stock

share of ownership in a publicly held company

Forbearance

temporarily stop making payments or reduce payment up to 12 months interest will accrue on subsidized and unsubsidized loans

Sticker Price

the college's published cost of attendance

Net Price

the difference between the two- the real amount that your family pays

Open-ended credit

the lender places a limit on how much a customer can borrow during a period of time

Amortization

the reduction of a loan balance through payments made over a period of time

Pro-rate

to divide over a period of time

Deferment

you do not make payments government may pay your interest