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
- 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.
- Deficit SpendingSpending more than you earn over a period, which means the gap has to be covered by savings or borrowing.
- Grace PeriodA short window after a due date during which you can pay without a penalty or, on some cards, avoid interest entirely.
- Debt-to-Income Ratio (DTI)The share of your monthly income that goes to debt payments — a key number lenders check.
- Living Paycheck to PaycheckRelying on each paycheck to cover immediate bills with little or nothing left over, leaving no cushion for surprises.
- Credit ScoreA number that sums up how you've handled borrowing, shaping the rates you're offered.
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