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Glossary of debt and savings terms

2. Annual percentage rate, or APR -- A yearly interest rate 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 periodic rate and multiplying it by the number of billing periods in a year.

3. Annual percentage yield, or APY -- The percentage required by Truth in Savings Act regulations to be disclosed on interest-bearing deposit accounts. It reflects the total interest to be earned based on an institutionís compounding method, assuming funds remain in the account for a 365-day year.

4. Assets -- Personal possessions of value, including cash, real estate and investments.

5. Average daily balance -- This is the method by which most credit cards calculate a customer's payment due. An average daily balance is determined by adding each day's balance and then dividing that total by the number of days in a billing cycle. The average daily balance is then multiplied by a card's monthly periodic rate, which is calculated by dividing the annual percentage rate by 12. A card with an annual rate of 18 percent would have a monthly periodic rate of 1.5 percent. If that card had a $500 average daily balance, it would yield a monthly finance charge of $7.50.

6. Balance transfer -- The process of moving an unpaid credit card debt from one card to another. Card issuers sometimes offer teaser rates to encourage balance transfers coming in and balance-transfer fees to discourage them from going out. Customers making a balance transfer should know exactly when the introductory teaser rate expires so they don't get caught paying a higher rate later.

7. Brokerage account -- An account at a securities firm or brokerage that can hold investments, such as stocks, bonds, mutual funds and exchange-traded funds, or ETFs. Cash not invested is generally held in a money market fund.

8. Cash-advance fee -- A bank charge assessed to a customer who uses a credit card to obtain cash. This fee can be charged as a flat per-transaction fee or as a percentage of the amount of the cash advance. For example, the fee may be expressed as follows: "2%/$10." This means the cash advance fee will be the greater of 2 percent of the cash advance amount or $10.

A bank may limit charges to a specific dollar amount. Depending on the bank issuing the card, the cash-advance fee may be deducted directly from the cash advance at the time the money is received or it may be posted to the customer's monthly bill as of the day the customer received the advance. Interest accrues from the moment the money is withdrawn.

9. Compound interest -- Interest determined by adding the interest earned in the current period to the principal and computing the next period's interest based on this "compounded" total amount.

-- Posted: Feb. 25, 2008
 
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NATIONAL OVERNIGHT AVERAGES
$30K HELOC 4.75%
Personal loan 15.53%
$30K Home equity loan 5.26%
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