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Learn about your debt

Make sure you know what you owe as well as terms and conditions about your debts. One of your first steps might be to get a credit report.

To be able to make the best financial decisions regarding you debt, you need to know the terms your creditors use. Here are some terms to help you understand your debt.

Annual Fee: A once-a-year fee charged by many credit card issuers in addition to the interest charged on purchases.

Annual Percentage Rate (APR): The total annual percentage amount it will cost a person to use credit.

Bankruptcy: A legal process that allows someone deeply in debt to create a plan to get out of debt.

Bond: A security representing a loan of money from a lender to a borrower for a set time period, which pays a fixed rate of interest.

Budget: A plan for spending and saving money based on a person’s goals during a given time period.

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