balance -- An outstanding amount of money. In banking, balance refers to the amount of money in a particular account. In credit, balance refers to the amount owed.

balance transfer -- Repayment of one credit debt with another credit source.

balance transfer fee -- The fee charged to transfer balances between two credit sources. This fee is often a percentage of the amount transferred.

billing cycle -- The period of time that a credit statement covers.

billing statement -- The summary of all actions applied to a credit account during a billing cycle. These can include payments, purchases, finances charges, fees and other transactions.

bounced check-- A check that a bank has refused to cash or pay because you have no funds to cover it in your account.

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canceled check -- A "used" check that has been paid and subtracted from the check-writer's account. Canceled checks have extra data on them from the bank. The images are usually mailed to the writer each month with the statement, although many banks keep records that are available upon request. Canceled checks are excellent receipts that should be kept for reference and tax purposes.

capital -- A stock of accumulated wealth used or available for producing more wealth.

cardholder agreement -- The written statement that defines and explains all legal terms for a credit card agreement. It includes payment terms, billing dispute procedures and communications guidelines, among other items.

cash -- Money in the form of paper and coins (e.g., U.S. dollars and cents). In banking, this is the act of paying a check.

cash advance fee -- A fee assessed when a card holder uses a credit card to obtain cash. These fees are often charged as a percentage of the cash obtained.

cashier's check -- A check issued by a bank, drawn on its own funds rather than on one of its depositor's funds.

certificate of deposit -- A savings account in which an individual promises to deposit the money for a set period of time, for which the bank pays higher interest than a regular savings account.

charge card -- A card that requires a user to pay off the entire balance every month.

check -- Any written document instructing a bank to pay money from the writer's account.

check card -- See debit card.

checking account -- An account for which the holder can write checks. Checking accounts pay less interest than savings accounts, or none at all.

clear -- A check "clears" when its amount is debited (subtracted) from the payer's account and credited (added) to the payee's account.

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collateral -- Anything that a bank accepts as security against the debtor's not repaying a loan. If the debtor fails to repay the loan, the bank is allowed to keep the collateral. Collateral is most commonly in the form of real estate (e.g., a home).

compound interest -- Interest calculated not only on the original principal, but also on the interest already accrued.

co-signer -- The person who signs on a credit agreement in addition to the primary applicant. This person is legally responsible for repayment of the debt.

credit bureau -- An agency that checks credit information and keeps a complete file on people who apply for and use credit.

credit card -- A plastic card that gives access to a line of credit. Users are limited in how much they can charge, but they are not required to repay the full amount each month. Instead the balance (or "revolve") accrues interest with only a minimum payment due.

credit limit -- The maximum amount of money a borrower can access in a credit account.

credit rating -- A banks evaluation of whether a person is suitable to receive credit. Credit ratings are based on an individual's character, capacity to repay, and capital.

credit report -- A summary of the credit usage of a consumer, including payment histories and current status of all credit accounts. This plays a very large part in the decision to grant credit to a consumer.

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debit -- A bookkeeping term for a sum of money owed by an individual or institution; a charge deducted from an account.

debit card -- A banking card enhanced with ATM (automated teller machine) and POS (point-of-sale) features that can be used to purchase goods and services electronically. The card replaces cash or checks. Transactions are deducted from the cardholder's checking account either immediately or within one to three days. Depending upon the type of card, a debit card may require the user to sign his or her name or enter a PIN (personal identification number) into special equipment.

deposit slip -- An itemized slip showing the exact amount of paper money, coin, and checks being deposited to a particular account.

depositor -- An individual or company that puts money in a bank account.

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endorse -- To sign, as the payee, the back of a check before cashing, depositing, or giving it to someone else. The first endorsement must be made by the payee to authorize the transaction. Later endorsements may be made by whomever receives the check.

fixed rate -- An interest rate that does not vary over time.

grace period -- The length of time between the use of credit to make a purchase and the start of interest on the amount charged.

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index -- A published interest rate that is used to determine the actual rate charged with a variable interest rate account. The prime rate, published in the Wall Street Journal, is often used as the index.

interest -- The fee paid for the use of money. Interest may be paid, for example, by an individual to a bank for credit card use, or by a bank to an individual for holding a savings account. Interest is expressed in terms of annual percentage rate (APR).

introductory rate -- A temporarily low interest rate, used as incentive to entice a consumer to sign up for credit. After the introductory period, the rate will increase to the standard percentage.

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joint account -- A savings or checking account established in the names of more than one person (e.g., parent/child, wife/husband).