Financial Terms Flashcards

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Adjustable-Rate Mortgage (ARM)

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A mortgage with an initial fixed interest rate for a specified period, then resets periodically, often monthly.

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401(k) Loan

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A loan from your retirement savings account, typically repayable with interest within 5 years.

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Amortization

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Paying off debt over time in equal installments; part of each payment goes to the principal, the rest to interest.

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Annual Fee

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A yearly charge for having a specific credit card, independent of card usage.

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Annual Percentage Rate (APR)

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The yearly cost to borrow money, including fees, expressed as a percentage.

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La tasa anual efectiva (TAE)

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The calculated cost as a percentage paid each year for borrowing money, including fees

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Authorized User

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A person who has permission to use and/or carry another person's credit card, but isn't legally responsible for paying the bill

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Balance Transfer

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The act of transferring debt from one credit card account to another, usually for a fee

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Cash Advance

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A credit card service that allows cardholders to withdraw a certain amount of cash, either through an ATM or directly from a bank, typically at a high interest rate or for a fee

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Cash Back

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A credit card benefit that pays the cardholder a small percentage of their net expenditures, often as cash, payment toward their balance, reward points, travel miles, or gift cards