Glossary of Credit Related Terms

Daily Periodic Rate

The daily periodic rate is your annual interest rate expressed on a daily basis. It equals 1/365th of your annual percentage rate.

Debit Card

Purchases are deducted directly from the consumer's personal checking account, like an ATM card.

Debt-To-Income Ratio

Your income compared to the debt you owe.

Deductible

The portion of a loss that the insured party must pay before the insurer payment coverage begins.

Deduction

The amount that one is able to subtract from their income reported for tax purposes

Default

Failure to pay a debt as outlined in the cardholder agreement, bankruptcy, or an inability or unwillingness to pay your debt. If you default on your credit card account, the issuer will cancel your account and demand full payment of the outstanding balance.

Deferred Payment

Payment put off to a future date or extended over a period of time. Watch out for skip-a-month offers. Interest still accumulates when you skip a month.

Delinquency

Past-due payment on a loan.

Delinquency Assessment

A fee that is charged for a late payment.

Disclosure

Disclosure refers to a credit report given to the consumer which shows what’s in their credit records as outlined by the FCRA (Fair Credit Reporting Act).

Discount

An amount deducted from the regular price for those who purchase with cash instead of credit.

Discretionary Income

The money you have left over when all expenses and other financial obligations are paid.

Disposable Income

Money left over after taxes are deducted.

Dispute

Credit and charge card bills are governed, in the United States, by the Fair Credit Billing Act, which is included in the Truth in Lending Act (see Truth in Lending Act). If you think your bill is wrong, write to your card issuer at the address listed on your statement. You must write no later than 60 days after receiving the first statement where the error appeared. The card issuer must acknowledge your letter within 30 days, and correct the error or explain why it thinks the statement was correct, within two billing cycles (but in no event later than 90 days) after receipt of your letter. You do not have to pay the amount in question while it is being investigated, but you must pay the rest of your bill.

Due Date

The day a payment is due to a creditor. After that date, a late fee can be charged and the payment can be recorded as late, or the account can be considered delinquent.