A defined contribution plan offered by a corporation to its employees, which allows employees to set aside tax-deferred income for retirement purposes, and in some cases employers will match their contribution dollar-for-dollar. Taking a distribution of the funds before a certain specified age will trigger a penalty tax. The name 401(k) comes from the IRS section describing the program.

The annual payment of an allowance or income; the right to receive this payment or the obligation to make this payment; a contract or agreement by which one receives fixed payments on an investment for a lifetime or for a specified number of years.

A rise in value or price, especially over time.

Also known as Annual Percentage Rate, it is the interest rate which a customer will pay on a finance agreement, including all fees.

Annual Percentage Yield, expressing an annual rate of interest you’ll earn if you leave a lump sum in your account for one full year. Use it to compare what institution gives you the best return on your money.

The process by which the parties to a dispute submit their differences to the judgment of an impartial person or group appointed by mutual consent or statutory provision

An adjustable rate mortgage, or an "ARM" as they are commonly called, is a loan type that offers a lower initial interest rate than most fixed rate loans. The trade off is that the interest rate can change periodically, usually in relation to an index, and the monthly payment will go up or down accordingly.

Anything owned that has exchange value; anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value.

An authorized user on your credit card is someone who you have given permission to use your credit card. An authorized user can receive and use a credit card with his/her name on it, but is not legally responsible for repaying the credit card balance. The credit card payment history will appear on the authorized user’s credit report. That can be a good thing if the payment history is good, but a bad thing if the credit card payment history is bad.

To obtain or receive (something) on loan with the promise or understanding of returning it or its equivalent.

An itemized forecast of an individual's or company's income and expenses expected for some period in the future. With a budget, an individual is able to carefully look at how much money they are taking in during a given period, and figure out the best way to divide it among a variety of categories.

Debt that has been determined uncollectible by the original creditor, usually after the debtor has become seriously delinquent. Typically charge-offs occur after six months of non-payment.

An individual other than the borrower who signs a promissory note and thereby assumes equal liability for it.

Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default.

An organization that assists debtors in establishing a healthier financial picture. Typically, the focus is on establishing a workable budget and developing a reasonable debt repayment plan.

Debt incurred for consumable or depreciating assets that are not considered investments.

Also known as a Credit Reporting Agency or Consumer Reporting Agency, functions as a central repository of credit and collection records, payment history and certain legal information on consumers and businesses. The three major U.S. credit bureaus are Equifax, Experian and TransUnion. A fourth credit bureau, Dun and Bradstreet Corp., specializes in reporting business credit information exclusively.

Any card that may be used repeatedly to borrow money or buy products and services on credit. Issued by banks, savings and loans, retail stores, and other businesses.

A wide-ranging term for theft and fraud committed using a credit card or any similar payment mechanism as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account. Credit card fraud is also an adjunct to identity theft.

The amount of credit a financial institution extends to a client. It also refers to the maximum amount a credit card company will allow someone to borrow on a single card.

A numeric expression of a person's creditworthiness that is used by lenders to access the likelihood that a person will repay his or her debts. A credit score is based on, among other things, a person's past credit history. It is a number between 300 and 850, the higher the number, the more creditworthy the person is deemed to be.

An organization that takes deposits and makes loans. Credit unions are non-profit and run as a co-operative by the depositors of the union.

A person or institution to whom money is owed by a debtor; someone to whom an obligation exists.

An item of debt as recorded in an accounting entry which results in either an increase in assets or a decrease in liabilities or net worth.

An agency that pursues payments on debts owed by individuals or businesses for a fee or percentage of the total amount owed.

Initiating one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.

A unique strategy developed to help a debtor manage their debt. This strategy is usually developed and implemented by an outside company or organization on behalf of the debtor, usually because the debtor is unable to sufficiently manage their debt on their own, due to lack of knowledge or because they are overwhelmed by the amount of debt.

The partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations.

A person, business or organization responsible for paying an invoice.

The act or process of deducting; subtraction.

The amount by which a sum of money is less than the required amount; specif., an excess of liabilities over assets, of losses over profits, or of expenditure over income.

To lodge in some one's hands for safe keeping; to commit to the custody of another; to intrust; esp., to place in a bank, as a sum of money subject to order.

A decrease in price or value; decrease in value of an asset due to obsolescence or use.

A rebate on taxes or duty paid for imported goods which are subsequently exported in the same form or a different form.

The process of becoming a member.

The market value of a debtor's property in excess of all debts to which it is liable.

Interest rate stays the same throughout the life of the loan, or throughout a specified portion of the life of the loan.

Extra time allowed, as for payment of a note, insurance premium, etc. after it is due.

An individual's income before taxes, health insurance and other deductions are paid.

A rate which is charged or paid for the use of money.

Money committed or property acquired for future income.

An itemized list of goods shipped or services rendered, stating quantities, prices, fees, shipping charges, etc.; bill.

Individual Retirement Account. A tax-deferred retirement account for an individual that permits individuals to set aside money each year, with earnings tax-deferred until withdrawals begin at age 59 1/2 or later (or earlier, with a 10% penalty).

Bank account equally shared by two or more individuals. Parties involved all share the associated rights and liabilities of the account and are regarded by law as co-owners of the account. This means that if anything happens to the account, such as defaults, overdrafts and fraud, all parties are affected.

Entity that advances cash to a borrower for a stated period and for a fixed or variable rate of interest, with or without a security other than the borrower's signatures.

A general term describing a financial ratio that compares some form of owner's equity (or capital) to borrowed funds.

An obligation that legally binds an individual or company to settle a debt.

To convert to cash.

The amount owed on a loan less the amount of payments made.

Amount required in an account to earn interest, qualify for special services, or waive service charges. Accounts that fall below the minimum balance may be subject to service charges if the average balance is below that threshold.

Total revenue minus total expense, what's left of the monies received after all debts have been paid, the bottom line. If Net Income is positive it is also called Net Profit. A negative Net Income is a Net Loss.

The act of binding oneself by a social, legal, or moral tie.

A card that you pay up front, and the money charged on the card is deducted from the balance.

A fee assessed by a lender on a borrower who repays all or part of the principal of a loan before it is due.

The original amount of a debt on which interest is calculated.

A promise to pay a specified amount on demand or at a certain time.

The action of regaining possession (especially the seizure of collateral securing a loan that is in default).

Debt backed by a mortgage, pledge of collateral, or other lien; debt for which the creditor has the right to pursue specific pledged property upon default.

Referring to an expense which can be offset against taxation liabilities.

A reduction in income tax liability resulting from incurring specified expenditure.

A limited period of time.

A person (or institution) to whom legal title to property is entrusted to use for another's benefit.

Debt that does not identify specific assets that the debtholder is entitled to in case of default.

A rate that goes up or down depending on money market interest rates.

A written receipt, acquittance, or release which may serve as evidence of payment or discharge of a debt, or to certify the correctness of accounts.

The act of taking out money or other capital.