Money deposited with a financial institution for investment and/or safekeeping purposes.
Affinity Card
A credit card affiliated with a third party that derives a value-added benefit from each transaction. For example, an alumni association or a museum may be awarded a percentage of all transactions charged to the affinity credit cards of the organization's members.
Annual Fee
The once-a-year cost of owning a credit card. Some credit card providers offer cards with no annual fee. The annual fee, with interest and other fees are part of the total cost of credit.
Annual Percentage Rate (APR)
The yearly interest charge applicable to outstanding credit card balances. It is one part of the total cost of credit.
Assets
Items of monetary value (i.e. house, land, car), owned by an individual or a company.
Automated Teller Machine (ATM)
A machine that processes current and savings account withdrawals and deposits, credit card cash advances and some types of payments (utility bills, for example). Accounts are accessed with an ATM, credit, or debit card.
Automatic Payments
Utility companies, loan payments, and other businesses may use an automatic payment system with bills paid through direct withdrawal from a bank account.
Average Daily Balance
Financial institutions measure and compute how much you owe on an average day of your billing cycle, and use the average amount to calculate how much interest you owe for the month. Different financial institutions use different ways to do this.
Balance
An outstanding amount of money. In banking, balance refers to the amount of money in a particular account. In credit, balance refers to the amount owed.
Balance Transfers
Allow you to take your balance from one credit card and pay off another, ideally with a lower cost.
Bankcard
A credit or debit card issued by a financial institution.
Bankruptcy
A legal declaration of insolvency. It can stop foreclosures, repossessions, garnishments and debt collection activities. While bankruptcy will not clean up a bad credit record, it will be part of the credit record for a number of years, depending on a country's bankruptcy laws. It usually does not wipe out child support, alimony, fines, taxes and some student loan obligations.
Bounced Check
A "bounced" check is one that a financial institution has refused to cash or pay. It might be because the account was closed, or there were insufficient funds to cover the amount of the check. Non-sufficient funds (NSF) are one reason for a bounced check.
Business Card
A credit card for small business owners. Business expenses are charged to this card to simplify bookkeeping and tax preparation.
Capital
A stock of accumulated wealth used or available for producing more wealth.
Cash
Money in the form of paper and coins. In banking, the act of paying a check - "to cash a check".
Charge Card
A plastic card that gives access to a usually unlimited line of credit. Charge cards must be paid in full at the end of each billing cycle.
Check
A written document instructing a financial institution to pay money from the writer's account.
Clear
A check "clears" when its amount is debited (subtracted) from the payer's account and credited (added) to the payee's account.
Chip Card/Smart Card
A card issued by a financial institution with an electronic chip embedded in it that can be loaded with multiple programs such as credit or debit card functions and frequent buyer or reward programs.
Co-branded Card
A credit card linked with a third party - a retailer or an airline, for example, that offers rebates, discounts or other value-added benefits to the user, based on the dollar value of purchases charged within a certain time frame.
Collateral
Anything that a financial institution accepts as security against the debtor's not repaying a loan. If the debtor fails to repay the loan, the financial institution is allowed to take the collateral. Collateral is most commonly in the form of real estate (i.e. a home) or property, like a car.
Compound Interest
Interest calculated not only on the original principal but also on the interest already accrued.
Credit
In business, buying or borrowing on the promise to repay at a later date. In any credit arrangement, there is a creditor (a person, financial institution, store, or company to whom money is owed) and a debtor (the person who owes the money). In bookkeeping, a sum of money due to an individual or institution.
Credit Bureau
A credit reporting agency that checks credit information and keeps files on people who apply for and use credit.
Credit Card
A plastic card that gives access to a line of credit. Users are limited in how much they can charge, but they are not required to repay the full amount each month. Instead the balance "revolves" or accrues interest with only a minimum payment due.
Credit Limit
The maximum dollar amount that can be charged on a specific card account.
Credit Rating
A financial institution's evaluation of whether a person is suitable to receive credit. Credit ratings are usually based on an individual's character, capacity to repay and capital.
Credit Report
A report on a consumer's level of indebtedness and bill paying behavior. Information for the report is submitted to credit reporting agencies (or credit bureaus) from an individual's creditors. The agencies compile the report and release it to lenders and others with the consumer's permission.
Currency
Money - anything used as a common medium of exchange. In practice, currency means cash, particularly paper money. Bankers often use the phrase "coin and currency" to refer to cents and dollars.
Current or Checking Account
An account in which a consumer places cash or makes deposits, and for which the holder can write checks. Sometimes fees are charged if minimum requirements aren't met.
Cyberbanking
Banking through online internet services. Financial institutions with website "cyber" branches allow customers to check balances, pay bills, transfer funds, compare savings plans, and apply for loans on the Internet.
Debit
A bookkeeping term for a sum of money owed by an individual or institution; a charge deducted from an account.
Debit Card
A card enhanced with ATM and point-of-sale features that can be used to purchase goods and services electronically. The card replaces cash or checks. Transactions are deducted from the cardholder's savings or current/checking account directly. Depending upon the type of card, a debit card may require a signature or entering a PIN number into special equipment.
Deposit Slip
An itemized slip showing the exact amount of paper money, coin, and checks being deposited to a particular account.
Depositor
An individual or company who puts money in an account.
Direct Deposit
Earnings (or government payments) automatically and electronically deposited into accounts, saving time, effort and money.
Electronic Cash
Companies are developing electronic replicas of all existing payment systems - cash, check, credit cards, debit cards and coins.
Finance Charge
This term covers the total cost of credit. It includes interest, and all other charges established by the issuing financial institution as a condition of credit. Charges may include: service fees, late fees, transaction fees and other miscellaneous charges.
Financial Institution
An establishment where you can deposit, borrow or exchange money.
Fixed Rates
An interest rate that doesn't change. The APR (annual percentage rate) is usually a fixed rate.
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