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Houston Mortgage > Glossary >
Credit Card > A 1-10
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Acquiring financial institution
Merchants must maintain an account with an acquiring financial institution to receive credit for credit card transactions. Daily credit card totals are deposited into the merchant's account minus any fees.
Add-on interest
Interest that is computed at the beginning of the loan, then added to the principal, so that all must be repaid, even if the loan is paid off early.
Additional principal payment
Extra money included with a loan payment to pay off the amount owed faster. Over time, this practice reduces the amount of interest paid.
Adjusted balance
A method used by some card issuers in which they subtract all payments made during the month, then add the finance charges.
Affinity card
A card offered by two organizations, one a lending institution, the other a non-financial group. Schools, nonprofit groups, pro wrestlers, popular singers and airlines are among those featured on affinity cards. Usually, use of the card entitles holders to special discounts or deals from the non-financial group.
Air miles
One of the most popular rewards issued by airline-affiliated co-branded cards. Air miles are earned with every use of the card, and then transferred monthly to the cardholder's account with that airline.
Amount financed
The principal that is financed. It could include the cost of the purchase and other items rolled into the payments.
Annual fee
A bank charge for use of a credit card levied each year, which can range from $15 to $300, billed directly to the customer''s monthly statement. Many credit cards come without an annual fee.
Annual percentage rate (APR)
A yearly rate of interest that includes fees and costs paid to acquire the loan. Lenders are required by law to disclose the APR. The rate is calculated in a standard way, taking the average compound interest rate over the term of the loan, so borrowers can compare loans. In mortgages, it is the interest rate of a mortgage when taking into account the interest, mortgage insurance, and certain closing costs including points paid at closing. There is no APR in an automobile lease; instead, the cost of money is expressed as the money factor.
Application
A document in which a prospective borrower details his or her financial situation to qualify for a loan.
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Houston Home Mortgage