Financial Literacy Terms

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annual percentage rate

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the yearly interest rate charged on borrowed money. Expressed as a percentage and indicates how much interest the borrower will pay over the course of a year.

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asset

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any resource that holds or contains value that can be converted to money

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bankruptcy

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a legal status that a person or entity can enter when they're unable to repay their debts. Carries significant financial consequences.

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budget

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A systematic plan for the spending of a usually fixed resource, such as money or time, during a given period.

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checking account

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Bank account used mostly for payments via written checks or electronic debit

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collateral

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pledged for the payment of a loan

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comparison shopping

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a strategy that consumers can use to save money on purchases. It consists of comparing the prices of similar products to determine which is least expensive

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compound interest

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interest paid or to be paid both on the principal and on accumulated unpaid interest

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credit

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a financial arrangement in which money is borrowed for a purchase and paid back at a later date.

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credit card

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A card issued by a bank or other institution authorizing the purchase of goods on credit.