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Credit Card Glossary - D

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Money one person or firm owes to another person or firm.
Debit Card
Looks like a credit card but issued by your bank. Charges are drawn directly from the cardholder's account, typically a checking or savings account. The withdrawal of funds is immediate with online debit cards, delayed a day or two with offline debit cards. Cards with MasterCard or Visa logo can be used at any location that takes MasterCard of Visa credit cards.
Failure to make payments according to the terms of the cardholder agreement. Could be a late payment, no payment, or paying less than the minimum amount due. This gives the creditor the option to penalize you with a higher interest rate. Your account is charged as delinquent if you go 30 days without a payment. This will possible be noted in your credit repot. Call the issuer and work out a plan before you fall behind on your bills.
Debt Consolidation
The replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. It's also called a consolidation loan.
Debt-to-Income Ratio
The percentage of before-tax earnings that are spent to pay off loans for obligations such as auto loans, student loans and credit card balances. Lenders look at two ratios. The front-end ratio is the percentage of monthly before-tax earnings that are spent on house payments (including principal, interest, taxes and insurance). In the back-end ratio, the borrower's other debts are factored in.
Technically, a person who has filed a petition for relief under the bankruptcy laws. More generally, anyone who owes.
The condition that occurs when a consumer fails to fulfill the obligations set out in a loan or lease
Discount Rate
The interest rate at which financial institutions that are members of the Federal Reserve System (Fed) may borrow on a short-term basis directly to cover temporary deficiencies in the bank?s reserves. Banks borrow from the Fed as a last resort because frequent borrowing would raise concern by bank regulators.
Down Payment
An initial, partial payment on a purchase.
Delinquency Rates
Some cards with low rates for on-time payments apply a very high APR if you are late a certain number of times during a specified period. Look at your credit card application for these special delinquency rates because these can sometimes exceed 20%.