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| Pre-approved | A credit card offer with "pre-approved" only means that a potential customer has passed a preliminary credit-information screening. A credit card company can spurn the customers it invited with "pre-approved" junk mail if it doesn't like the applicant's credit rating. |
| Previous balance | A method used by some card issuers where they base their finance charges on the amount owed at the end of the previous billing cycle. |
| Prime rate | The interest rate a bank charges its best or "prime" customers. Each bank will quote a prime lending rate. Many institutions quote prime rates established by large money center commercial banks. There is also a prime rate average listed in the Wall Street Journal that is an average of the largest commercial banks. The rate given to consumers on their loans is often based as the prime rate plus a certain percentage, which represents the lender's assessment of the risk in lending, plus its profit margin. |
| Principal | The amount of money borrowed. The amount of money owed, excluding interest. |
| Private label cards | A private label card is issued by a retail outlet, such as a department store or gasoline company, and contains the logo of the retailer. It is accepted only by the retailer who issued it. Retailers partner with a bank or a card-issuing management company to back the cards. |
| Qualifying ratios | As calculated by lenders, the percentage of income that is spent on housing debt and combined household debt. The first qualifying ratio, called the front ratio, is the percentage of monthly before-tax income that goes toward a house payment. The back ratio is the sum of the house payment and all other monthly debt -- credit cards, car payments, student loans and the like -- divided by before-tax income. |
| Rate | Percentage a borrower pays for the use of money, usually expressed as an annual percentage. |
| Rate 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. |
| Rebate card | This is a credit card that allows the customer to accumulate cash, merchandise or services based on card usage. |
| Recession | A prolonged period (popularly defined as two successive quarters) in which economic activity shrinks. |
| Redemption | Debtors may keep exempt secured property even though they owe money on it by paying the creditor the collateral value of the property rather than the amount of the debt. Note that in some cases the "value" of the collateral may be less than the amount owed on it. In these cases it may be advantageous for the debtor to redeem the property. |
| Regional bank | A bank with a primary market in a regional or metropolitan area but takes deposits from throughout the state in which it is located. It is typically more expansive than a community bank, but more restrictive than a national financial institution. |
| Regulation Z | A rule, enforced by the Federal Reserve Board and implementing the Truth-in-Lending Act, that requires lenders to disclose all credit-related costs including the annual percentage rate. |
| Remaining balance | Unpaid principal on a loan. |
| Remaining term | The time it will take to pay off the rest of an installment loan as scheduled. |
| Reorganization plan | A Chapter 11 or 13 plan describing the terms by which the debtor intends to repay his debts, usually over a three- to five-year period. |
| Repayment plan | Modification of an existing loan after the borrower has been delinquent. Often used when the borrower misses payments but the lender does not foreclose. |
| Returned or "bounced" check charge | Also referred to as an NSF or non-sufficient funds fee. The amount of money charged to an account holder whose account has insufficient funds available to pay the check, which is returned to the party who cashed it unpaid. (The bank did not advance the funds to cover check. |
| Revolver | A term credit card issuers use for card holders who roll over part of the bill to the next month, instead of paying off the balance in full each month. About seven out of 10 cardholders revolve the debt. |
| Revolving credit | A line of credit that does not have a specified repayment schedule but may require a minimum payment to cover interest and contribute to paying off principal. Typical of credit card loans, checking account cash reserve or overdraft accounts that have pre-approved lines of credit. |
