Financial Terms Flashcards

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Amortization

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The process of gradually paying off a debt over time through regular payments.

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Annual Fee

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A yearly charge by a financial institution for maintaining an account or credit card.

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Annual Percentage Rate (APR)

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The yearly interest rate charged on borrowed money, expressed as a percentage.

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Bankruptcy

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A legal status for individuals or entities that cannot repay their debts.

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Billing Cycle

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The period of time between statement dates for a credit account, typically lasting around 30 days.

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Collateral

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An asset offered by a borrower to a lender to secure a loan, which can be seized if the loan is not repaid.

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Collections

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The process of pursuing payments of debts owed by individuals or businesses.

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Co-Signer

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A person who agrees to pay a borrower's debt if the borrower defaults, often used to help secure loans.

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Credit

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The ability to borrow money or access goods or services with the understanding that payment will be made later.

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Credit Bureaus: Equifax, Transunion, Experian

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Companies that collect and maintain consumer credit information, providing credit reports to lenders.