A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Installment LoanA loan repaid in fixed, scheduled payments over a set term, such as an auto loan, student loan, or personal loan.
- Credit CardA card that lets you borrow from a lender for purchases up to a limit, requiring repayment and charging interest on unpaid balances.
- Credit LimitThe maximum amount a lender lets you borrow on a credit card or line of credit before charges get declined.
- Credit UtilizationThe share of your available credit that you are currently using, calculated by dividing your balances by your credit limits.
- Line of CreditA flexible borrowing arrangement that lets you draw funds up to a limit as needed and pay interest only on what you use.
- Minimum PaymentThe smallest amount you can pay on a credit card each month to stay current, though paying only this keeps you in debt longer.
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Plain-English education — not personalized legal, tax, or investment advice.