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Account Number
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A unique number given to a person. Your account number is the same as the credit card number.
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Additional Card Holder
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- allows you to add a family member to your credit card. They have access to the same credit limit and interest rate that you do
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Annual Fee
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- a fee charged by a credit card every year for the right to use the credit card. Some credit card companies will remove an annual fee if you call them, and tell them you will cancel your card if they don't remove the annual fee
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Annual Percentage Rate (APR)
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- interest shown as a yearly rate
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Average Daily Balance Method
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- a way to calculate interest for a billing cycle. It is calculated by adding every day's balance and dividing that number by the number of days in the billing cycle. Then it is multiplied by the monthly interest rate. The final number is the amount of interest a person owes for that billing cycle. This is only used if a person does not pay their full balance
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Balance
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- the amount of money on a credit card that a person has left to repay
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Balance Transfer
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- moving a credit card balance from one card to another usually done when a bank offers a special interest rate on a transfer. For instance when you apply for a new credit card they may have an offer for 0% interest rate on balance transfers for 6 months
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Balance Transfer Fee
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- a fee charged for transferring a credit card balance from one account to another. Usually the fee is 1% to 5% of the total balance transferred. Not all credit cards have this fee
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Bankruptcy
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A legal proceeding that relieves you of the responsibility of paying your debts or provides you with protection while attempting to repay your debts. There are two types of bankruptcies -- liquidation, in which your debts are wiped out (discharged) and reorganization, in which you provide the court with a plan for how you intend to repay your debts. For both consumers and business, liquidation bankruptcy is called Chapter 7. For consumers, reorganization bankruptcy is called Chapter 13. Reorganization bankruptcy for consumers with an extraordinary amount of debt and for businesses is called Chapter 11. Reorganization bankruptcy for family farmers is called Chapter 12.
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Bankruptcy Trustee
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A person appointed by the court to oversee the case of a person or business that has filed for bankruptcy. In a consumer Chapter 7 case, the trustee's role is to gather the debtor's nonexempt property, liquidate it and distribute it proportionally to her creditors. In a Chapter 13 case, the trustee's role is to receive the debtor's monthly payments and distribute them proportionally to her creditors
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Billing Cycle
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- a period of time between credit card bills usually a month to 25 days
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Billing Statement
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- a monthly credit card bill that shows a person's balance, due date, finance charges, payments, purchases, and rewards
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Card Holder Agreement
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- The printed agreement that states the terms and conditions of a credit card account. The cardholder agreement is required by Federal Reserve regulations. It must include the annual percentage rate, the monthly minimum payment formula, annual fee if applicable, and the cardholder's rights in billing disputes. Changes in the cardholder agreement may be made, with written advance notice, at any time by the issuer. Rules for imposing changes vary from state to state, but the rules that apply are those of the home state of the issuing bank, not the home state of the cardholder
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Cash Advance
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- an instant loan from a credit card company. The advance is charged interest the day it was requested until it is paid off. A cash advance usually has a higher interest rate than regular purchases and some credit card companies charge a transaction fee
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Cash Advance Fee
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- a fee charged when a person uses their credit card to receive a cash advance. This fee is either a percent of the amount received or a flat rate. Please check your credit card agreement to find the terms of your cash advance fee
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Cash Back
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- a credit card company pays a card holder a percentage of the purchases they make usually between %.05 to 5%
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CCCS
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A national non-profit agency that, at no cost, helps debtors plan budgets and repay their debts. One major criticism of CCCS is that each office is primarily funded by voluntary donations from the creditors that receive payments from debtors repaying their debts through that office. Despite this criticism, most CCCS counselors provide clients with thorough and neutral advice.
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Chapter 13 Bankruptcy
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The reorganization bankruptcy for consumers, in which you partially or fully repay your debts. In Chapter 13 bankruptcy, you keep your property and use your income to pay all or a portion of the debts over three to five years. The minimum amount you must pay is roughly equal to the value of your nonexempt property. In addition, you must pledge your disposable net income -- after subtracting reasonable expenses -- for the period during which you are making payments. At the end of the three-to five-year period, the balance of what you owe on most debts is erased
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Chapter 7 Bankruptcy
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The most familiar type of bankruptcy, in which many or all of your debts are wiped out completely in exchange for giving up your nonexempt property. Chapter 7 bankruptcy takes from three to six months, costs about $200, and commonly requires only one trip to the courthouse.
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Charge Card
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- a card that does not charge interest, but the balance must be paid in full every month
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Chargeback
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- a customer disputes a charge on their credit card, and the credit card company removes the charge from the customers bill and charges the merchant for the purchase
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Collection Agency
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A company hired by a creditor to collect a debt that it is owed. Creditors typically hire a collection agency only after they have made efforts to collect the debt themselves, typically through letters (called "dunning" letters) and telephone calls. Collection agencies are regulated by the federal Fair Debt Collection Practices Act. Unfortunately, too many collectors ignore this law.
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Compounding Method
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- the way a credit card company figures the interest rate
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Consumer Credit
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- a loan that is given to a person for personal use
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Credit Balance
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- amount of money a bank owes to a customer. This can happen when you buy something and return it. The merchant then credits your card the price
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Credit Bureau
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An account of your credit history, prepared by a credit bureau. A credit report will contain both credit history, such as what you owe to whom and whether you make the payments on time, as well as personal history, such as your former addresses, employment record and lawsuits in which you have been involved. An estimated 50% of all credit reports contain errors, such as accounts that don't belong to you, an incorrect account status or information reported that is older than seven years (ten years in the case of a bankruptcy).
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Credit Bureau
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- a business that records people's credit habits including; number of credit cards, payment habits, balance on credit cards, and employment history. A person has the right to see their credit file
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Credit Card Number
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- an exclusive number assigned to each card
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Credit History
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- a record of a person's debt and repayment of debt.Credit Limit - the maximum amount a person can borrow from a credit card
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Credit Insurance
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Insurance a lender requires a borrower to purchase to cover the loan. If the borrower dies or becomes disabled before paying off the loan, the policy will pay off the remaining balance. Federal and state consumer protection laws require the lender to disclose to existing and potential borrowers the terms and costs of obtaining credit insurance because it can affect the terms of the loan
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Credit Rating
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- a rating based on a persons ability to pay interest and repay a credit card balance
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Credit Report
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- a document that lists a person's credit history. This can include; credit, employment, residence, judgments, tax liens, bankruptcies or similar matters of public record entered against the individual
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Credit report
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Debit Card
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- a plastic card that a bank issues that allows a person to withdraw money from an ATM
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Debt Consolidation
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- instead of paying off several bills a month, this allows a person to only pay one bill
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Deed in Lieu
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means of escaping an overly burdensome mortgage. If a homeowner can't make the mortgage payments and can't find a buyer for the house, many lenders will accept ownership of the property in place of the money owed on the mortgage. Even if the lender won't agree to accept the property, the homeowner can prepare a quitclaim deed that unilaterally transfers the homeowner's property rights to the lender.
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Default
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failure to perform a legal duty. For example, a default on a mortgage or car loan happens when you fail to make the loan payments on time, fail to maintain adequate insurance or violate some other provision of the agreement. Default on a student loan occurs when you fail to repay a loan according to the terms you agreed to when you signed the promissory note, and the holder of your loan concludes that you do not intend to repay.
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Defaulted Account
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- is a credit card account when the customer has not kept their end of the agreement to the contract. A record of defaulted accounts is kept for six years after the customer breaks the agreement
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Delinquent Account
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- means a customer fails to repay any of their balance in three months, or a customer has been late on a payment for three months in a year
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Discharge of Debts
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A bankruptcy court's erasure of the debts of a person or business that has filed for bankruptcy
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Dishonored Check
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- payment has been denied to the person trying to cash the check
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Electronic Fund Transfer Act (EFTA)
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A federal law that gives you certain rights in the event that mistakes occur on your ATM or bank statements or if your ATM card is lost or stolen. Generally, you have a duty to report the mistake or lost card--and the sooner the better. If you notify the bank in a timely manner, it is under a duty to rectify the mistake or not charge you for withdrawals made by someone else with your card. If you delay in reporting your card lost or stolen, however, you can be liable for up to $500, or an unlimited amount if you don't report the problem for more than 60 days.
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Express Cash
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- a special program offered by American Express that allows you to use your credit card at ATMs
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Fair Credit Billing Act (FCBA)
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A federal law that gives you rights when an error occurs on your credit card statement. You must notify the credit card company of the mistake within 60 days after it mailed the bill to you. The company must then correct the mistake, or at least acknowledge receipt of your letter within 30 days, and must correct the error within 90 days or explain why it believes the credit card statement is correct.
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Fair Credit Reporting Act (FCRA)
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A federal law that is designed to prevent inaccurate or obsolete information from entering or remaining in a credit report. The law requires credit bureaus to adopt reasonable procedures for gathering, maintaining and disseminating information and bars credit bureaus from reporting negative information that is older than seven years, except a bankruptcy, which may be reported for ten. If you notify a credit bureau of an error in your credit report, the FCRA requires the bureau to investigate your allegations within 30 days, review all information you provide, remove inaccurate and unverified information and adopt procedures to keep the information from reappearing. In addition, the law requires that creditors refrain from reporting incorrect information to credit bureaus.
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Fair Debt Collection Practices Act (FDCPA)
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A federal law that outlaws unfair debt collection practices, including lying, harassing, misleading and otherwise abusing debtors, by debt collectors working for collection agencies. The law does not apply to creditors collecting their own debts. This law has greatly improved conditions for debtors, although more than a few debt collectors ignore the law. If a collection agency violates the law, debtors can contact the Federal Trade Commission for help.
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FAKO score
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Federal Trade Commission (FTC)
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A federal government agency established to regulate business practices and enforce antitrust laws. The FTC often shows up in the news when big businesses merge, but it also plays a role in protecting consumers from unfair business practices, including actions by collection agencies and credit bureaus. While the FTC generally does not have authority to intervene in individual consumer disputes, the FTC can take action against a company about which it has received numerous consumer complaints.
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FICO score
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Finance Charge
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- fees charged to a person's credit card for interest, late, over the limit, cash advance, or balance transfer
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Fixed Interest Rate
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- an interest rate that remains the same even if the prime rate changes. A credit card company can still change a fixed interest rate, but to do so they must tell you they are changing the rate
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Floor
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- the lowest rate possible for a variable interest rate. Even if the prime rate drops the interest rate will never go below the floor rate
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Forbearance
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Voluntarily refraining from doing something, such as asserting a legal right. For example, a creditor may forbear on its right to collect a debt by temporarily postponing or reducing the borrower's payments.
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Foreign Spending
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- when you make a purchase in a foreign currency; the charge will automatically be converted to your country's currency by the rate of exchange on that day
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Forfeiture
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The loss of property or a privilege due to breaking a law. For example, a landlord may forfeit his or her property to the federal or state government if the landlord knows it is a drug-dealing site but fails to stop the illegal activity. Or, you may have to forfeit your driver's license if you commit too many moving violations or are convicted of driving under the influence of alcohol or drugs.
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Fraud
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Intentionally deceiving another person and causing her to suffer a loss. Fraud includes lies and half-truths, such as selling a lemon and claiming "she runs like a dream."
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Fraud Protection
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- protects your credit card incase it is lost or stolen. You will not have to pay for any unauthorized purchases. Please read your credit card agreement to find the exact conditions of your fraud protection
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Grace Period
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- an amount of time after the billing cycle a person has to pay off their balance before they are charged interest. If a person carries a balance there is no grace period. A grace period is usually 20 - 30 days long
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Guarantee
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When used as a verb, to agree to pay another person's debt or perform another person's duty, if that person fails to come through. As a noun, the written document in which this assurance is made. For example, if you cosign a loan, you have made a guaranty and will be legally responsible for the debt if the borrower fails to repay the money as promised. The person who makes a guaranty is called the guarantor. Also known as a guarantee or warranty.
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Guarantor
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A person who makes a legally binding promise to either pay another person's debt or perform another person's duty if that person defaults or fails to perform. The guarantor gives a "guaranty," which is an assurance that the debt or other obligation will be fulfilled.
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Head of Household
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A person who supports and maintains, in one household, one or more people who are closely related to him by blood, marriage or adoption. Under federal income tax law, you are eligible for favorable tax treatment as the head of household only if you are unmarried and you manage a household which is the principal residence (for more than half of the year) of dependent children or other dependent relatives. Under bankruptcy homestead and exemption laws, the terms householder and "head of household" mean the same thing. Examples include a single woman supporting her disabled sister and her own children or a bachelor supporting his parents. Many states consider a single person supporting only himself to be a head of household as well.
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Homestead
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(1) The house in which a family lives, plus any adjoining land and other buildings on that land. (2) Real estate which is not subject to the claims of creditors as long as it is occupied as a home by the head of the household. After the head of the family dies, homestead laws often allow the surviving spouse or minor children to live on the property for as long as they choose. (3) Land acquired out of the public lands of the United States. The term "homesteaders" refers to people who got their land by settling it and making it productive, rather than purchasing it outright.
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Homestead Declaration
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A form filed with the county recorder's office to put on record your right to a homestead exemption. In most states, the homestead exemption is automatic--that is, you are not required to record a homestead declaration in order to claim the homestead exemption. A few states do require such a recording, however.
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Identity Theft
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- the act of stealing an individual's personal information to steal their credit cards, bank account, and other finances. An identity thief will take your social security number, birth date, address, name, and bank account information
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Interest Rate
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- the percentage rate that is charged to unpaid balances
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Introductory Rate
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- the starting interest rate for a new credit card usually only lasts for three to six months
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Issuer
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- a financial institution that provides a credit card
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Judgment
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A final court ruling resolving the key questions in a lawsuit and determining the rights and obligations of the opposing parties. For example, after a trial involving a vehicle accident, a court will issue a judgment determining which party was at fault and how much money that party must pay the other.
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Late Fee
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- a charge received from missing the payment due date. If a person is mailing a payment they should mail it at least 5 days before the due date
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Lien
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The right of a secured creditor to grab a specific item of property if you don't pay a debt. Liens you agree to are called security interests, and include mortgages, home equity loans, car loans and personal loans for which you pledge property to guarantee repayment. Liens created without your consent are called nonconsensual liens, and include judgment liens (liens filed by a creditor who has sued you and obtained a judgment), tax liens and mechanics liens (liens filed by a contractor who worked on your house but wasn't paid).
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Life of the Balance
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- an interest rate that is applied to a balance until it is paid off. The interest rate will not change
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Line of Credit
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Line of Credit - the amount of credit extended from a lender to a borrower. In the case of a credit card, it is the maximum you can charge to your card
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Loan Consolidation
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The combining of a number of loans into a single new loan. Consolidation typically extends your repayment period and lowers your monthly payments, thereby greatly increasing the amount of interest you pay over the life of your loan.
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Mail or Telephone Rule Order
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Federal Trade Commission rule that requires a seller to ship goods ordered by mail, phone, computer or fax to you within the time promised or, if no time was stated, within 30 days. If the seller cannot ship within that period, the seller must send you a notice with a new shipping date and give you the option of canceling your order and getting a refund.
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Meeting of Creditors
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A meeting held with the bankruptcy trustee about a month after you file for bankruptcy. You must attend. The trustee reviews your bankruptcy papers and asks a few questions. In a Chapter 7, the meeting of creditors lasts a few minutes and rarely do any creditors show up. In a Chapter 13 bankruptcy, one or two creditors may attend, especially if they disagree with some provision of your repayment plan.
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Minimum Finance Charge
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- The interest applied to your balance is under $.50 you will be charged $.50 in interest. If you do not pay your balance in full, but only have a small balance remaining you will probably receive a minimum finance charge. Many credit cards have a one
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Minimum Payment
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- the least amount a person must pay a credit card company for their statement
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Nondischargable Debt
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Debts that cannot be erased by filing for bankruptcy. If you file for Chapter 7 bankruptcy, these debts will remain when your case is over. If you file for Chapter 13 bankruptcy, the nondischargeable debts will have to be paid in full during your plan or you will have a balance at the end of your case. Examples of nondischargeable debts include alimony and child support, most income tax debts, many student loans and debts for personal injury or death caused by drunk driving. Compare dischargeable debts.
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Nonexempt Property
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The property you risk losing to your creditors when you file a Chapter 7 bankruptcy or when a creditor sues you and wins a judgment. Nonexempt property typically includes valuable clothing (furs) and electronic equipment, an expensive car that's been paid off and most of the equity in your house. Compare exempt property.
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Nuisance Fees
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Money charged by some credit card companies to increase their profits when you fail to use the card the way the creditor wants. Examples include late payment fees, inactivity fees and fees for not carrying a balance from month to month. It's best to shop around and get rid of cards that have these fees attached.
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Nulla Bona
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Latin for "no goods." This is what the sheriff writes when she can find no property to seize in order to pay off a court judgment.
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Offline Debit Card
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- a new form of debit card that either has VISA or MasterCard logo and can be used anywhere a VISA or a MasterCard can be. This card does not have a line of credit it deducts the payment from a person's checking account
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Online Statement
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- a credit card statement that can be viewed over the Internet. Please refer to statement for more information
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Outstanding Balance
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- the amount of money a customer owes to a bank. This includes the principal and interest
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Over the Limit Fee
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- a charge for exceeding the limit of your credit card
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Periodic Rate
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- the interest rate for a specific amount of time usually either monthly or daily. It is determined by dividing the Annual Percentage Rate by the amount of time. For months Time = 12 and for days Time = 365
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Personal Identification Number (PIN)
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- a number code used like a password. You use this number to get cash from ATMs, and when you are talking to a customer service representative they may ask for your PIN for verification
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Personal Property
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All property other than land and buildings attached to land. Cars, bank accounts, wages, securities, a small business, furniture, insurance policies, jewelry, patents, pets and season baseball tickets are all examples of personal property. Personal property may also be called personal effects, movable property, goods and chattel, and personalty. Compare real estate.
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Pre-Approved
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- a person has only passed a preliminary screening. It does not mean a person is guaranteed a credit card
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Previous Balance
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- a way credit card companies determine how much interest is owed. It is the previous balance multiplied by the interest rate
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Prime Rate
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- the interest rate offered to the creditors best customers
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Proceeds From Damaged Exempt Property
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In a bankruptcy proceeding, money collected through insurance, arbitration, mediation, settlement or a lawsuit to pay for exempt property that's no longer exemptible because it has been damaged or destroyed
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Recent Activity
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- purchases a person makes after the billing cycle is over. These purchases will be included in your next billing cycle
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Repossession
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A creditor's taking property that has been pledged as collateral for a loan. Lenders will most often repossess cars when the owner has missed loan payments and has not attempted to work with the lender to resolve the problem. A repossessor can't use force to get at your car, but he can legally hot-wire it and even drive it out of your unlocked garage.
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Secured Card
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- a type of credit card that is linked to a bank account. A person's credit limit is based on how much money they have in their bank account. This card is ideal for people who have problems spending more than they can pay off
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Secured Debt
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A debt on which a creditor has a lien. The creditor can institute a foreclosure or repossession to take the property identified by the lien, called the collateral, to satisfy the debt if you default. Compare unsecured debt.
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Settled Account
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- means a customer has repaid their credit card balance
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Short Sale
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A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes. See also deed in lieu (of foreclosure).
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Skimming
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- the act of copying one credit cards magnetic strip information onto a different credit card. If a person has purchases on their statement that they know they didn't make they should contact their credit card company immediately.
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Statement
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- shows your balance transfers, finance charges, interest rate, payments, purchases, and rewards for last month's billing cycle. A statement is usually mailed to a person every month
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Subrogation
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A taking on of the legal rights of someone whose debts or expenses have been paid. For example, subrogation occurs when an insurance company that has paid off its injured claimant takes the legal rights the claimant has against a third party that caused the injury, and sues that third party.
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Teaser Rate
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- also called the introductory rate, this is the below market interest rate offered when a person first applies for a credit card
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Transaction
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- the act of purchasing an item, receiving a cash advance, transferring a balance, or making a payment. Your transactions are listed on your monthly statement
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Tri-Merge Report
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A credit report that has information from all three credit bureaus (see Triple Merged Report
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Triple Merged Report
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A credit report that has information for all three credit bureaus
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Truth in Lending Act (TILA)
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A federal law that requires credit and charge card companies to disclose interest rates and other information about an account. It also requires lenders to disclose the terms of a loan, including the total amount of the loan, the annual interest rate and the number, amount and due dates of all payments necessary to repay the loan. The TILA requires additional disclosures and places many restrictions on mortgages.
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Two Cycle Average Daily Balance
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- When figuring the interest on a credit card. The company will take the average of the last two billing cycles. If a person has this on their credit card they should switch cards, because you will pay a lot more in interest than a credit card that uses average daily balance to figure the interest
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Two Cycle Billing
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- means the same thing as two cycle average daily balance. You should find a credit card that uses average daily balance to calculate interest. To find out which method your credit card company is using you need to look at your statement or your contract. If you still can't find it you can call the company and they are required to tell you
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Unconscionability
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A seller's taking advantage of a buyer due to their unequal bargaining positions, perhaps because of the buyer's recent trauma, physical infirmity, ignorance, inability to read or inability to understand the language. The unfairness must be so severe that it is shocking to the average person. It usually includes the absence of any meaningful choice on the part of the buyer and contract terms so one-sided that they unreasonably favor the seller. A contract will be terminated if the buyer can prove unconscionability.
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Unsecured Debt
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A debt that is not tied to any item of property. A creditor doesn't have the right to grab property to satisfy the debt if you default. The creditor's only remedy is to sue you and get a judgment. Compare secured debt.
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Variable Interest Rate
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- The interest rate on a credit card that fluctuates based on the prime rate
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Void
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- to invalidate. When you void a check, you are canceling the check so no one can cash it. When you void a credit card transaction you are reversing the transaction.
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Workout
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A debtor's plan to take care of a debt, by paying it off or through loan forgiveness. Workouts are often created to avoid bankruptcy or foreclosure proceedings
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Zero Balance
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- When a credit card customer's bill has been paid off and there are no new charges during that billing cycle
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