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Annual fees A yearly fee charged by credit grantors for the privilege of using a credit card.

Annual percentage rate (APR) The periodic rate times the number of periods in a year. For example, a 5% quarterly return has an APR of 20%.

Balance 1. An amount of money you owe, such as the balance on your credit card. 2. An amount of money you own, such as the balance in your checking account. 

Bankruptcy A person's legal declaration that he or she is legally insolvent. There are two types of bankruptcy: Involuntary Bankruptcy, where creditors or lenders file a petition against the debtor (person in debt), and Voluntary Bankruptcy, where the debtor files a petition claiming inability to meet creditors' requirements. A court decides whether or not a debtor can declare bankruptcy. 

Budget An itemized listing of the money a person (or company) will take in, and how much will be paid out (expense), over a specified period of time (usually monthly). 

Consolidation Loan A loan usually obtained for the purpose of reducing the amount of the payments of bills owed by consolidating the bills into one loan payment. The consumer pays off several bills with the proceeds from one loan and is left with one consolidated monthly payment.

Collateral Property acceptable as security for a loan or other obligation.

Credit A means of borrowing money from a person or company and returning it at a later date, usually with accrued interest charged on top of the initial sum borrowed. 

Credit Bureau An agency that provides credit and collection data on consumers within a particular time frame (usually measured in years). This data comprises people's credit histories, and can be released in the form of credit reports. 

Credit Counselor A person at a credit counseling service who is qualified to offer advice on how to manage outstanding debts or answer other credit questions. 

Credit History A partial profile of your financial life given within a particular time frame (usually measured in years). It shows the extent to which you pay your bills on time and how much you may owe particular parties. 

Credit Report A document that lists your credit history and was created and updated using information from banks, merchants and other creditors.

Debt Management  A process to reduce, and eventually erase outstanding debt by managing assets and dealing with creditors. This can be created with the help of a Credit Counselor. 

Expenses Products and services--usually necessary ones--that you spend money on. 

Finance Charge The total cost of a loan in dollars and cents. The Finance Charge includes interest, service and transactional fees, and other fees charged against a loan. 

Grace Period The period allowed to avoid any finance charges by paying off the balance in full before the due date.

Interest The price paid to a lender for the use of borrowed money (or some other commodity). Interest Rate The amount of interest charged, usually a percentage of the money borrowed, calculated over a year. 

Lease A written document containing the conditions under which the possession and use of real and/or personal property are given by the owner to another for a stated period and for a stated consideration.

Lien A legal hold or claim of one person on the property of another as security for a debt or charge. The right given by law to satisfy debt.

Mortgage A lien or claim against real property given by the buyer to the lender as security for money borrowed. 

Public Record Information obtained by the Credit Reporting Agency from court records, such as liens, bankruptcy filings and judgments. Public records are open to any person who requests them.

Repossession Forced, or voluntary surrender of merchandise as a result of the customer's failure to pay as promised. There are several types and descriptions of repossession accounts. 

Revolving account An account, which requires at least a specified minimum payment each month plus a service charge on the balance. As the balance declines, the amount of the service charge, or interest, also declines.

Secured Credit Card A credit card secured by a savings account that has been established in advance by the borrower. The amount in the account usually determines the limit on the credit card. These accounts present no real risk factor for creditors and are therefore much easier to obtain. 

Variable Expenses that are not fixed and are likely to change from month to month.