In Other Words (Glossary of Terms)
Not sure what something means? Here’s a list of definitions for you to refer to!
Dividend Rate: The extra money you earn (paid by the credit union) on the balances in your savings and checking account.
Compounding Dividend: When you earn money on top of the money you have already earned (from your Dividend Rate)
APY: An abbreviation for Annual Percentage Yield. The APY is the rate a person will earn in one year on money they have deposited plus the dividends they have received (see “Dividend Rate.”)
Interest: The extra cost you pay to borrow money; it is added to the original amount borrowed, accrues monthly, and is included in the payment due each month. The interest rate you pay is usually determined by your credit worthiness.
APR: An abbreviation for Annual Percentage Rate. The total of the cost of credit (loan) given to a person. It is expressed as an annual (yearly) percentage of the total amount of credit allowed to one person. Because this number must be given to each customer who receives credit, the APR makes it easier to compare the rates offered by lenders on credit cards and loans.
Gen Y: This term is used to refer to the generation of people born roughly between the years of 1982 and 1994. This generation is also at times referred to as "Millennials,” “Echo Boomers,” and "Generation Why.”
Credit Union: A credit union is a cooperative financial institution that is owned and controlled by its members. It is a not-for-profit organization and exists to provide loans at reasonable/lower rates to its members and pay higher rates on deposits. A credit union works to provide the best and most beneficial and cost-effective products and services without worrying about profit.
Late Fee: A fee that is charged when a loan or credit payment is made after the payment due date. It is a penalty that is used to encourage payments to be made on time.
Overdraft/Overdrawn: An overdraft occurs when withdrawals from a bank account exceed the available balance, which gives the account a negative balance (i.e. an overdrawn account.) As a result of an overdraft, fees may be charged by the financial institution as well as by the person the original payment was made to.
Overdraft Protection: Overdraft protection pays items presented to a customer’s account when sufficient funds are not in the account to cover the amount of the item or withdrawal. This protection allows those items to be paid instead of being returned unpaid, or “bouncing.”
Identity Theft: A term used to refer to fraud that results in personal gain by a person pretending to be someone else. The person whose identity is stolen can suffer various consequences before and after the fraudulent activity is revealed. In the United States, it is a crime to use another person’s identity for personal and/or financial gain. The continuing high rising rate of identity theft is making it even more important for people to protect their personal information.