 | Mark Kolarik is the President of the Kansas Teachers Community Credit Union, located in Pittsburg, KS, since 10-2002 and is a board member of the Kansas Corporate Credit Union located in Wichita, KS . He has been employed in the financial service industry for the last 31 years, having worked in several credit unions for 21years and 10 years in the banking industry. He holds a Bachelor of Business Administration degree from the University of Wisconsin-LaCrosse and is a Certificated Credit Union Executive. |
Banking & Finance
2012-03-27 10:21:10
What do all the financial terms mean - series - part 1
A: You’re right, staff at most financial institutions often forget that most customers do not understand many of the financial terms discussed. Thanks for asking, here is a list and definition of common terms.
Annual Percentage Rate (APR) -
The rate of interest (in terms of a percent, such as 8.75%) being charged for a loan over a year’s time. The APR rate includes interest, transaction fees, and service fees.
Annual Percentage Yield (APY) -
The amount of compounded interest earned on a deposit account after one year.
ATM Surcharge -
A fee charged by the owner of an ATM for use by non-customers.
Bond -
An IOU issued by a corporation or government that confirms you are lending the corporation or government money. Bonds pay interest regularly to lenders. At the end of the term of the bond, the borrower returns to the lender the face value of the bond (the amount the lender invested in the bond).
Broker -
A licensed professional who advises people about investments; also helps people buy and sell stocks, bonds, mutual funds, etc. The broker earns a fee for this help, called a commission, usually a percentage of the transaction.
Credit Rating -
Credit agencies are companies that keep track of how you pay your debts (bills). Do you pay on time? Do you make the required payments? When you want to borrow money from a financial institution or apply for a credit card, the financial institution or the credit card company will ask a credit agency to rate you. Lenders want to know if you are a reliable bill payer before they approve your loan or credit card.
Debit Card -
This plastic card looks like a credit card, but it is used to withdraw money from a savings or checking account. When you use a debit card at Automatic Teller Machines (ATM) or in stores to make purchases, money is immediately withdrawn from your account. You cannot withdraw more money than you have in the account.
Next month, we will get into interest rates, shared, variable expenses and more.
