Credit Card Glossary - D
A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z
- Debt
- 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.
- Default
- 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.
- Debtor
- Technically, a person who has filed a petition for relief under the bankruptcy laws. More generally, anyone who owes.
- Default
- 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%.