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Important Banking Terms

Have you ever been to a bank and wondered what the heck the employees were talking about when they were referring to various banking processes? Or, have you had to fill out various forms and not know what some of the banking terms were? If so, you should find out more about the banking terms that are the most important to know.

About Banking Terms

One of the most important banking terms that you should know is “annual percentage rate” or APR. An annual percentage rate is the yearly cost of the credit that you have. This banking term is most often associated with loans. The percentage of APR that a person with a loan is charged depends on the term of the loan, the amount that was financed for the loan, and the various finance charges.

Something that no one wants to have to deal with is bankruptcy. Bankruptcy is a banking term that you have no doubt heard before, but bankruptcy is more than just having no more money, bankruptcy is actually a legal action. This legal action usually applies to people who no longer have the credit to pay their bills. By declaring bankruptcy, it is sometimes possible to not have to take responsibility to pay certain financial debts.

If you have ever applied for a credit card, chances are that on the application you have noticed the banking term “cardholder agreement.” What this means is that by filling out the application you agree to all of the legal billing procedures that come along with you getting the credit card. What this basically means is that you understand that although you can charge things on your credit card, you will also have to pay that money back.

Another banking term that credit card users should know about is “cash advance fee.” If you find yourself in a situation where you need money and want to use your credit card to do so, various fees will be applied. This usually is based on the about of money that you actually need.

Something that many people are unsure of is the difference between a credit card and a debit card. A debit card is directly linked to your checking account. You can use a debit card like a credit card, accept that while a credit card just charges the money, the debit card takes that amount directly out of your checking count.

If you would like more information on banking terms, all you have to do is search the internet, where there are a variety of different websites available. It really is a good idea to know some of the more commonly used ones, so you can be aware the next time you go to the bank!