Glossary of Credit Related Terms

Minimum Payment

The minimum amount you are required to pay the credit card issuer each month. You may, however, choose to pay more. Paying the minimum monthly payment may be helpful when you can only afford to make a small payment. However, interest charges can really add up when you stretch out a loan with minimum payments. For example, at an 18.5 percent interest rate, it will take you more than 11 years to pay off a debt of $2,000 if you only pay the minimum balance due each month. During this time, you will pay interest charges of $1,934 -- almost doubling the cost of your purchase. (This calculation is based on making a payment which is 1/36th of the outstanding balance, or $20, whichever is larger.)

Monthly Periodic Rate

The rate of interest per month, calculated by dividing the annual percentage rate (APR) by 12.

Mortgage

A lien or claim against real property given by the buyer to the lender as security for money borrowed.1st Mortgage-Also known as the "primary" mortgage-has priority over the claims of subsequent lenders for the same property.2nd Mortgage-Also know as the "secondary" mortgage-is a loan secured by mortgage or trust deed, which lien is "junior" to another mortgage or trust.