Financial glossary
Plain-English definitions for Learning Center terms.
- APR
Annual Percentage Rate — the yearly cost of borrowing expressed as a percentage, before some fees depending on product disclosures.
- Daily periodic rate
A daily interest factor often derived by dividing APR by 365 or 360, used inside many card interest calculations per the issuer agreement.
- Average daily balance
A common method that averages your balance across days in a billing cycle before applying periodic interest according to the agreement.
- Credit utilization
The share of available revolving credit you are using; often discussed as a scoring factor in educational materials.
- Grace period
A period when interest may not accrue on new purchases if you pay certain balances as required by your agreement.
- Minimum payment
The least amount due by the due date to keep an account current under the issuer’s rules.
- Emergency fund
Savings set aside for unexpected necessary expenses or income interruptions.
- Debt snowball
A payoff strategy that targets the smallest balances first for momentum while paying minimums on other debts.
- Debt avalanche
A payoff strategy that targets the highest interest rates first while paying minimums on other debts.
- Lifestyle inflation
The tendency for spending to rise with income, sometimes reducing savings and debt-payoff capacity.