KEYTERMS TOPIC 6
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- Created by: romana.h@hotmail.com
- Created on: 29-11-17 18:21
APR
Annual percentage rate – the total cost of borrowing over one year, including the interest charged and any fees.
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ATM
Automated teller machine, also known as a cash machine.
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BANK RATE
The interest rate that the Bank of England uses when it lends money to other banks. Financial services providers take account of the Bank rate when they decide how to set interest rates on their own products.
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BASIC BANK ACCOUNT
A current account that allows people to store their money as an electronic balance and make payments by direct debit, standing order, prepaid cash card or by withdrawing cash.
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BALANCE TRANSFER
Moving the balance (total amount owed) on a card from one card provider to another.
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CARD VERIFICATION VALUE
Three numbers on the back of a credit or debit card. These are a security measure designed to prevent fraudulent use of the card by someone other than the cardholder.
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CASHBACK CARD
A type of card that gives back to the cardholder a percentage of the value of transactions made with the card, in the form of cash.
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CHARGE CARD
A credit card that must be repaid in full every month.
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CHEQUE
A written instruction to the provider (e.g. the bank or building society) to pay a specified amount to a specified person or organisation.
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CONSUMER CREDIT
This is another term used for borrowing. It is important to understand that ‘taking credit’ or ‘buying on credit’ refers to borrowing. However, a credit into a bank account means paying money in.
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COST OF BORROWING
Also called ‘cost of credit’. This is the total amount that the borrower will be charged including interest and any fees. For personal loans and credit card borrowing the cost over a 12- month period must be quoted – the annual percentage rate.
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CREDIT AGREEMENT
The formal agreement between a provider and a borrower setting out the amount borrowed, the interest charged, the arrangements for repayment and any other terms and conditions.
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CREDIT CARD
A card that allows the holder to make purchases face to face, online or over the phone, and to withdraw cash from an ATM. Unlike a debit card, where the money is taken from the holder’s own account, transactions are paid by the card provider.
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CREDIT HISTORY
A record of money borrowed and repaid by an individual. These records are held by credit reference agencies and providers will check the individual’s credit history when a prospective customer applies.
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CREDIT UNION
A mutual organisation (that is, owned by its members) that provides a range of financial products to members, eg savings accounts and personal loans. Members of a credit union must share a common bond.
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CURRENT ACCOUNT
A bank or building society account where people can store their money in the form of an electronic balance and withdraw it to make payments.
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DEBIT CARD
A card that can be used to withdraw cash, to make face-to-face transactions in, for example, shops, and to make payments online or over the phone.
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DIRECT CREDIT
An electronic payment into an account, for example a salary or benefit payment.
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DIRECT DEBIT
An electronic payment out of an account. The amount and frequency of a direct debit payment can vary.
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EAR
Equivalent annual rate – the cost of borrowing using an overdraft. The EAR includes only the interest rate, as fees are listed separately.
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INTEREST
Money either paid to an account holder by the provider, or charged to the account holder by the provider. Interest is paid on savings accounts and some current accounts and charged on borrowing, eg an overdraft.
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INETREST RATE
The amount, expressed as a percentage, that a financial services provider or pays to a saver, or charges a borrower when it lends money.
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MORTGAGE
A loan taken out to pay for a property, usually over a long term such as 25 years.
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OVERDRAFT
A facility that allows an account holder to withdraw more money than they actually have in their account.
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PAYDAY LOAN
A loan designed to be taken out for only a very short period, which charges a very high APR.
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PAYMENT ALLOCATION
The order in which a card provider uses money paid into an account to pay off the amount outstanding.
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PERSONAL LOAN
A product that allows someone to borrow a fixed amount over a fixed period at a fixed amount of interest.
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STANDING ORDER
An electronic payment out of an account. Standing orders are used to make regular payments of the same amount.
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STORE CARD
A card issued by a retailer that the holder can use to make purchases within that store or group of stores. As with a credit card, the amount owing is paid off at a later date, either in one payment or in instalments.
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Other cards in this set
Card 2
Front
Automated teller machine, also known as a cash machine.
Back
ATM
Card 3
Front
The interest rate that the Bank of England uses when it lends money to other banks. Financial services providers take account of the Bank rate when they decide how to set interest rates on their own products.
Back
Card 4
Front
A current account that allows people to store their money as an electronic balance and make payments by direct debit, standing order, prepaid cash card or by withdrawing cash.
Back
Card 5
Front
Moving the balance (total amount owed) on a card from one card provider to another.
Back
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