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Financial terms and jargon can be awfully intimidating! Our Personal Finance Glossary should be helpful in putting this finance lingo into simple everyday language.

Account

an arrangement at a financial institution for depositing, withdrawing, borrowing or investing money

Account Statement

a record of transactions in an account at a financial institution, usually provided each month

Annual Fee

a yearly charge or membership fee that credit card companies levy for the right to use or carry their credit card. This amount is payable whether the card is actually used or not

Annual Percentage Rate (APR)

the actual rate of interest charged on a loan each year. APR is calculated using standardized rules to help borrowers compare rates. The interest rate for each loan period multiplied by the number of periods in a year. For example, a loan that charges 5% interest per month, has an APR of 60%

Asset

any possession or property that has value in an exchange

Budget

a description of a spending and savings financial plan that lists the estimates of income and expenditures for a stated period of time

Cash Advance

a cash advance (sometimes called payday loan) provides a small, unsecured, short-term cash advance that is usually repaid on the borrower’s next payday

Cash Flow

the amount of money coming into a household (in the form of wages, investment earnings, etc.) minus the amount going out (via debts and expenses; a positive cash flow indicates that there is more money coming into a household than being spent

Credit

contractual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date

Credit Score

a measure of credit risk calculated from a credit report using a standardized formula. Factors that can damage a credit score include late payments, absence of credit references, and unfavorable credit card use.

Debit Card

a debit card is a plastic payment card that's linked to a checking, savings or pre-paid cash account. As the card is presented for a transaction, it is approved for payment and the transaction amount is almost immediately deducted from the account balance.

Debt

an amount owed to a person or organization for funds borrowed

Debt to Income Ratio

a comparison of the total amount of money someone owes in relation to their total income. This ratio is a good indicator of whether someone can afford to borrow more money. In general, lowering your debt to income ratio can raise your credit score and help you lower your interest rate.

Direct Deposit

an electronic transfer of funds into a bank or credit union account

Financial Literacy

the ability to read, understand financial concepts, along with the capability to discern financial choices that affect material well-being

Financial Plan

a written outline of financial goals and action steps required to achieve those outcomes (examples of goals include: setting up a retirement account, funding children’s education or saving cash reserved for emergencies)

Fixed Expenses

cash obligations that remain the same every month. (Some examples include rent or mortgage, car insurance or auto payments, student loans, etc.)

Gross Income

total income before adjustments, deductions or exemptions

Income

money you receive from work, business, investments, etc.

Interest

additional money paid by a borrower to the lender for the use of the loan amount

Late Charge/Late Fee

charges/fees from the lender when the borrower fails to make timely payment.

Loan

an arrangement where money or property is borrowed, in which the borrower agrees to repay the money on a specified schedule or return the property, usually with interest

Net Income

the amount of your income left after taxes have been deducted

Non-Sufficient Fund Fees

returned or "bounced" check fees (also called non-sufficient funds fees) are charged to an account holder when the bank returns a check unpaid because there was not enough money in the checking account to cover the check amount.

Pre-Paid Debit Card

a card where which cash is paid in advance and the balance declines as you make purchases or withdrawals

Variable Expenses

cash obligations that vary from month to month (Examples include: dining out, entertainment, gas, shopping and travel)

Payday loans should be used for short term financial needs only, not as a long-term financial solution.

Legal Disclaimer:
Legal Disclaimer: Information provided on the Consumer Education section of this website is believed to be accurate and reliable when placed on this site. Dollar Financial Group cannot guarantee it is accurate, complete or current at all times. Information on this site is for informational purposes only and is not intended to provide financial, legal, accounting or tax advice and should not be relied upon in that regard. You should seek guidance from a certified financial advisor or credit counselor for specific advice that is applicable to your individual situation.