Credit Card Help Center: Glossaey

Some terms you should familiarize yourself with in order to better understand how credit services work.

Credit Card Related

Grace Period: The period of time from the day your statement is ready to the day the payment is due. Grace period implies that the credit card company will charge you no interest given that you pay your amount due in full. Current industry standard for grace periods is about 20-25 days.
Annual Percentage Rate (APR): Annual Percentage Rate is the interest rate that applies to your credit card account. This rate varies depending on the account holder's credit score, and the current interest rates in the economy.
Introductory Rate: A temporary APR, which is offered by the credit card company. The introductory rate can be as low as 0%, and the introductory period can be as long as 18 months. Both depend on how desirable the customer is to the credit card company.
Pre-approved: Credit card companies may send pre-approved offers to prospective account holders. However, there are a couple of factors you should take into consideration before you reswpond to such offers. The pre-approved credit card offers usually pronounce relatively low interest rates, and pretty high limits. However, both the APR and the limit is subject to change. Because, the credit company will review your credit report if/after you respond to the offer, and most of the time, the APR and the limit you will be approved for will be a lot less attractive than the initial offer.
Secured Card: If your credit score is not high enough for you to qualify for a regular credit card, you may still be eligible for a secured card. Secured cards are no different from regular credit cards in appearance or usage. However, the secured card account holder is required to have a bank deposit usually about the same amount as the secured card's limit. If the secured card holder misses any payments on the account, the credit card company can reach this bank deposit. Secured cards are a good way to start establishing credit, however, they have higher fees and interest rates.
Debit Card: A debit card looks almost exactly like a credit card. However, it is associated not with a credit account, but with your checking account. Using a debit card in a purchase is pretty much like writing a check.
Personal Identification Number (PIN): Debit and credit cards can be used at Automatic Teller Machines (ATM) with a security code, which is called the personal identification number.

Mortgage Related

1/1 ARM: An adjustable-rate mortgage that has an initial interest rate for the first year, and thereafter has an adjustment interval of one year.
10/1 ARM: An adjustable-rate mortgage that has an initial interest rate for the first 10 years, and thereafter has an adjustment interval of one year.
3/1 interest-only ARM: An adjustable-rate mortgage in which none of the payments go toward retiring principals for the first three years.
80-10-10 Loan: A conbination of an 80% loan-to-value first mortgage, a 10% home equity loan, and a 10% down payment.
Adjustable-Rate Mortgage (ARM): A home loan in which the interest rate is changed periodically based on a standard financial index. Most ARMs have caps on how much the interest rate can rise or fall.
Alternative Mortgage: A home loan that is not a standard fixed-rate mortgage.
Biweekly Mortgage: A home loan that schedules payments every two weeks so that it is paid off sooner.
Combined Loan-to-Value Ratio: An overall mortgage debt load, expressed as a percentage of the home's fair market value.
Loan-to-Value Ratio: The percentage of the home's price that is financed.
Mortgage Broker: A person or firm that finds lenders for prospective borrowers to meet the lenders' criteria.
Mortgage Interest Expense: A tax term for interest paid on a loan that isfully tax-deductable.
Mortgage Refinance: A refinanced mortgage is one in which a borrower pays off an old loan with a new loan. People who refinance a mortgage usually do so to get a lower interest rate, lower their payments or to take cash out of their equity.
Private Mortgage Insurance (PMI): A form of insurance that protects the lender by paying the costs of foreclosing on a house if the borrower stops paying the loan.