Financial Terms Dictionary

A summary of all transactions, charges, payments, and fees on your account during a billing period. Always review your statement for errors — this is where PayLess.Help starts.

The yearly cost of borrowing money, expressed as a percentage. This includes interest and certain fees. A lower APR means less expensive borrowing.

A bill-paying method where the merchant or service provider automatically withdraws funds from your bank account or charges your card on a set schedule.

Moving debt from one credit card to another, usually to take advantage of a lower interest rate. Many cards offer 0% intro APR balance transfer promotions.

The minimum charge for utility service before any usage is calculated. This is the amount you pay even if you use very little electricity, gas, or water.

The period of time between one statement closing date and the next — usually about 30 days. Your charges during this period appear on your next statement.

A plan outlining your expected income and how you will allocate money for expenses, savings, and debt repayment. The foundation of financial health.

Combining multiple services (internet, TV, phone) with one provider for a discounted rate. PayLess.Help can help you negotiate better bundle pricing.

A savings product where you deposit money for a fixed period at a fixed interest rate. Withdrawing early typically incurs a penalty.

When a creditor writes off your debt as a loss, typically after 180 days of non-payment. The debt doesn't disappear — it's usually sold to a collection agency.

A bank account that allows deposits, withdrawals, and bill payments. It typically comes with a debit card and check-writing privileges.

A formal request to your insurance company for payment or coverage of a service or loss.

Your share of costs after you've met your deductible, expressed as a percentage. For example, if your coinsurance is 20%, you pay 20% and insurance covers 80%.

A company hired to pursue payment on debts that are past due. They may contact you by phone, mail, or email. You have rights under the Fair Debt Collection Practices Act (FDCPA).

Interest calculated on both the initial principal and the accumulated interest. Works for you in savings accounts, against you in credit card debt.

A fixed amount you pay for a covered healthcare service (e.g., $20 for a doctor visit). You pay this at the time of service.

The specific protections and benefits provided by an insurance policy. Understanding what is and isn't covered is essential to avoiding surprise bills.

The maximum amount a credit card issuer allows you to borrow on your card. Going over this limit can result in fees or declined transactions.

A detailed record of your credit history maintained by credit bureaus (Equifax, Experian, TransUnion). It includes your payment history, accounts, and public records.

A three-digit number (300–850) that represents your creditworthiness. Higher scores qualify you for better interest rates and terms. FICO and VantageScore are the most common models.

The percentage of your available credit that you are currently using. Keeping this below 30% is recommended for a healthy credit score.

Combining multiple debts into a single loan with one monthly payment, often at a lower interest rate. This simplifies repayment but doesn't reduce the total owed.

The percentage of your monthly gross income that goes toward paying debts. Lenders use this to assess your ability to manage payments. Below 36% is generally considered healthy.

The amount you must pay out of pocket before your insurance begins to cover costs. Higher deductibles usually mean lower premiums.

Failure to repay a debt according to the agreed terms. Defaulting has severe consequences including credit score damage, collection actions, and potential legal action.

The electronic transfer of money (usually your paycheck) directly into your bank account, eliminating the need for a physical check.

The date by which your payment must be received to avoid late fees. Missing this date can also negatively affect your credit score.

A charge for canceling a contract before its end date. Common with phone plans, internet service, and gym memberships. Often negotiable or waivable.

A cash reserve set aside for unexpected expenses like medical bills, car repairs, or job loss. Financial experts recommend 3–6 months of living expenses.

A document from your insurer detailing what was billed, what they paid, and what you owe. This is not a bill — it's a summary. Always compare it to your actual bill.

Federal Deposit Insurance Corporation protection that covers deposits up to $250,000 per depositor, per bank. This protects your money if the bank fails.

A legal process where a creditor can take money directly from your paycheck or bank account to satisfy a debt, usually after obtaining a court judgment.

The number of days you have to pay your bill in full before finance charges or interest begin accruing. Credit cards typically offer a 21–25 day grace period.

Your total earnings before taxes and deductions. This is the larger number on your paycheck.

The rate at which prices for goods and services increase over time, reducing the purchasing power of your money. This is why saving and negotiating bills matters — your dollars buy less each year.

A temporary, often lower interest rate offered when you first open a credit card or loan. This rate expires after a set period (usually 6–18 months).

A penalty charge added to your account when payment is not received by the due date. These can range from $25–$40 and are often negotiable.

How quickly and easily an asset can be converted to cash. A savings account is highly liquid; a house is not.

The smallest amount you can pay on a credit card bill to keep the account in good standing. Paying only the minimum results in significant interest charges over time.

Your take-home pay after all taxes and deductions. This is the actual amount deposited into your bank account.

The most you'll pay for covered services in a plan year. After reaching this amount, insurance pays 100% of covered costs.

When you spend more than your available balance, resulting in a negative account balance. Banks may charge overdraft fees of $30–$35 per transaction.

An account status indicating that a required payment was not made by the due date. Accounts that are past due may be reported to credit bureaus.

The amount you pay (monthly or annually) for your insurance coverage. This is your cost for having the policy, regardless of whether you file a claim.

A discounted rate offered for a limited time to attract new customers. When it expires, your bill may increase significantly — this is when PayLess.Help is most valuable.

An agreement that guarantees a specific rate for a set period. Common in mortgages and some utility contracts.

A charge that automatically repeats at regular intervals (monthly, annually). Subscriptions, memberships, and service plans are common recurring charges.

The team at a company specifically trained to keep customers from leaving. They have authority to offer discounts and deals that regular customer service cannot. PayLess.Help scripts are designed to get you to this department.

A nine-digit code identifying your bank or credit union. Used for direct deposits, automatic payments, and wire transfers.

A bank account that earns interest on your deposits. Designed for storing money you don't need for daily expenses.

A credit card backed by a cash deposit that serves as collateral. Often used to build or rebuild credit history.

An agreement to pay less than the full amount owed to resolve a debt. Creditors may accept settlements because receiving partial payment is better than receiving nothing.

The time period during which a creditor can sue you to collect a debt. This varies by state and debt type, typically 3–6 years.

The portion of your bill based on how much of a service you actually consumed (kilowatt-hours, gallons, data, etc.).

An electronic transfer of funds between banks or financial institutions. Typically used for large or time-sensitive payments.