Investing and, indeed, any other related business-related word can instantly turn otherwise informed and knowledgeable individuals from potentially beneficial financial initiatives. However, as with most things, something larger and denser can be broken down into digestible pieces. In much the same way, acquiring familiarity with credit vocabulary and jargon can help optimize financial wellness and credit card experience. With this information in mind, the following are nine common credit terms that explain investing the best.
Annual Percentage Rate
The first common credit term that explains investing the best is the annual percentage rate or APR. This measures the cost of credit as expressed in the form of an annual rate. The higher it is, the more that will need to be paid.
The second common credit term that explains investing the best is the bottom line. This phrase is common in many different contexts, but the bottom line is that in financial terms, the bottom line is the monthly expenses subtracted from the monthly income. Another bottom line is that ERA requirements should be met.
The third common credit term that explains investing the best is a balance transfer. It is possible to transfer balances between credit cards to make use of a lower interest rate. Such transfers are limited to the credit available on the recipient card.
The fourth common credit term that explains investing the best is a dispute. This essentially refers to lodging a complaint when a bill or something similar is perceived to be in error. If something appears to be in error, you can write to the issuer of the credit card at the address provided in the statement within the first sixty days of having received the first statement containing the error in question. The issuer is required to acknowledge the letter within thirty days, correct the mistake or explain why they believe there was no mistake within two billing cycles but no later than ninety days after the letter has been received.
Grace Period on Purchases
The fifth common credit term that explains investing the best is the grace period on purchases. Most credit card issuers offer grace periods on purchases should you pay the statement balance on time every month. If you fail to do so, you may not be entitled to a grace period on purchases until the statement balance has been paid on time for two consecutive months.
The sixth common credit term that explains investing the best is secured card. This credit card has been fully or partially collateralized by a cash deposit in a certificate of deposit or a specialized savings account. Certain banks might require deposits to remain in the accounts until the credit line’s closure or discontinuation of bank security upon it being deemed no longer necessary. The credit card’s credit line might occasionally be equal to the deposit amount. Should the cardholder default on the credit card, the issuer might apply the deposit to the remaining balance.
Variable Interest Rate
The seventh common credit term that explains investing the best is the variable interest rate. A variable interest rate is an interest rate that is subject to change based on economic indices like the U.S. LIBOR Rate or the Prime Rate.
The eighth common credit term that explains investing the best is prime rate. The prime rate is the interest rate charged by various major banks to some of their best corporate borrowers. Each bank has its prime rate. However, due to the sheer competitiveness of the rate, it may be the same at all banks.
The ninth and final common credit term that explains investing the best is revolving credit. It is essentially a credit agreement that lets customers pay some or all of an outstanding balance on a credit card or line of credit. The paid-off balance becomes newly available for new purchases or cash advances.
Investing is something that everyone can benefit from. Unfortunately, the popular perception of anything describing or defining anything related to economics or business as being little more than dense jargon turns off too many otherwise promising individuals who stand to benefit greatly potentially. For this reason, it helps to have someone simplify some of the relevant terminologies to demystify matters.