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 banks and financial institutions to customers for use of their services.

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Annual Percentage Rate (APR)

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The annual rate charged for borrowing or earned through an investment, expressed as a percentage.

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Authorized User

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A person who has permission to use a credit card account but is not responsible for paying the bill.

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Collateral

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An asset that a borrower offers to a lender to secure a loan.

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Cosigner

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A person who agrees to repay a loan if the primary borrower does not.

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Credit Card

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A card issued by a financial company giving the holder an option to borrow funds.

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Credit Card Agreement

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A contract outlining the terms and conditions of a credit card account.

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Credit Limit

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The maximum amount of credit that a financial institution extends to a client.

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Credit Score

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A numerical expression based on a level analysis of a person's credit files, representing the creditworthiness of an individual.