banking lingo

banking lingohttp://www.kulula.com:80/kulula-credit-card/banking-lingoLet's not pretend that all things financial aren't generally littered with convoluted words and impossible-to-understand phrases. Here are some of the basics, which we've simplified for you: <ul> <li>Administration order: This is when a person's spending gets way out of control and the courts make an order as to how their outstanding debts are going to be paid</li> <li>Arrears: These are payments due that have been missed</li> <li>Balance Transfer: The process of moving an unpaid credit card debt from one credit provider to another. Card issuers sometimes offer lower rates to encourage balance transfers coming in, but then charge a fee to discourage them going out</li> <li>Consolidation Loan:  This is where some or all of a person's existing debts are put into one loan. The advantage is that one loan payment is easier to manage</li> <li>Credit record / credit file:  Your credit file or record keeps track of all the money you've borrowed, all the applications you've made to borrow money and whether and how you've paid off your debts. Once you're blacklisted, it's very hard to clear your name, and this will affect you for the rest of your life (e.g. When you want to buy a house, it can reflect negatively if you've been sloppy in your financial habits). This is why you'll want to be smart about how you use money</li> <li>Creditor: This is the organisation you borrow money from, be it a bank or a retail store or a private lender</li> <li>Debt management company: A company that offers a range of financial solutions to help people with debt problems. You should be able to work out a plan with your bank, however, but for ongoing support this may be what you need to clear a large amount of unmanageable debt</li> <li>Debt Management Plan: This is a repayment scheme administered by a Debt management company or by your bank, for people who are unable to make their full contractual payments to their creditors</li> <li>Default Notice: This is the nasty letter a lender will send a customer when their account goes into arrears. Each lender is obligated by law to send this letter before they take legal action against you. When you get a letter like this, it's time to take your debts really seriously</li> <li>Interest: This is the charge made for borrowing money. It is usually calculated and charged monthly, and is often subject to inflation, unless the lender has stipulated that it's not</li> <li>Liability: This is just a pretty sounding word for Debt</li> <li>Repayment Protection / credit card insurance: This is insurance you take out in case you lose your job or are too ill to work. You usually take it out with your creditor, which is usually your bank</li> <li>Underwriter: A person trained to evaluate risk</li> </ul>