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| Finance charge | The charge for using a credit card, comprised of interest costs and other fees. The finance charge can be calculated with the following formula: Average Daily Balance x Daily Periodic Rate x Number of Days in Billing Cycle |
| Float | The amount of time the bank takes to clear -- or reject (bounce) -- a check for payment; the time at which funds are debited from the issuer?s account. |
| Floor | The minimum rate possible on a variable-rate loan or line of credit, after any initial introductory rate period. For example, on a credit card with the Prime rate as its index, no matter how low the Prime rate drops, the rate on the line may never decrease below the stated rate floor. |
| Foreign currency surcharge | A new charge imposed by some credit card issuers that imposes a fee on purchases made in a foreign currency. |
| Fresh start | The characterization of a debtor's status after bankruptcy. i.e., free of most debts. (Giving debtors a fresh start is one purpose of the Bankruptcy Code.) |
| Grace period | If the credit card user does not carry a balance, the grace period is the interest-free time a lender allows between the transaction date and the billing date. The standard grace period is usually between 20 and 30 days. If there is no grace period, finance charges will accrue the moment a purchase is made with the credit card. People who carry a balance on their credit cards have no grace period. |
| Household income | The total income of all members of a household. An important yardstick used by lenders evaluating applications for joint credit. |
| Independent bank | A bank that is locally owned and operated, and not associated with a bank holding company. Also referred to as a community bank. |
| Index | A table of yields or interest rates being paid on debt (such as Treasury notes or bank deposits) that is used to determine interest-rate changes for adjustable-rate mortgages and other variable rate loans such as credit card debt. Some of the most common indices are: the one-year Treasury Constant Maturity Yield; the Federal Home Loan Bank (FHLB) 11th District Cost of Funds; prime rate as listed in the Wall Street Journal. |
| Indexed rate | The sum of the published index plus the margin. For example, if the index is 8 percent and the margin 2.75 percent, the indexed rate is 10.75 percent. |
| Interest | Money paid for a borrower?s use of money, calculated as a percentage of the money borrowed and paid over a specified time. |
| Interest accrual rate | Percentage a borrower pays for the use of money, usually expressed as an annual percentage. |
| Interest rate | The amount charged per year on a personal or home loan. The rate varies according to the type of loan. Or, the percentage of interest paid for money in deposit accounts, without regard to compounding, shown as an annual figure. |
| Interest rate cap | A limit on how much a borrower?s percentage rate can increase or decrease at rate adjustment periods and over the life of the loan. |
| Interstate banking | Bank expansion across state lines through the use of bank holding companies and acquisitions of existing banks. |
| Introductory (or intro) rate | The low rate charged by a lender for an initial period to entice borrowers to accept the credit terms. After the introductory period is over, the rate charged increases to the indexed rate or the stated interest rate. Often called a teaser rate. |
| Issuing financial institution | The financial institution that issues a credit card and bills the customer for purchases made against the card account. |
| Joint credit | Issued to a couple based on both of their assets, incomes and credit reports. It generally results in a higher credit limit, but makes both parties responsible for repaying the debt. |
| Joint liability | The responsibility of two or more people to repay a debt. |
| Late charge | A fee imposed on a borrower for not paying on time. |
