Posted by Patrick Moreau on March 20, 2019 in Finance
Taking care of your money is very valuable. Here are some advices related to finance terms. Standard credit cards are referred to as “plain-vanilla” credit cards because they offer no frills or rewards. They’re also relatively easy to understand. You might choose this type of credit card if you want a card that isn’t complicated and you’re not interested in earning rewards. The standard credit card allows you to have a revolving balance up to a certain credit limit. Credit is used up when you make a purchase and then more credit is made available once you’ve made a payment. A finance charge is applied to outstanding balances at the end of each month. Credit cards have a minimum payment that must be paid by a certain due date to avoid late-payment penalties.
Obtaining a Payday Loan: Payday loan providers are typically small credit merchants with physical locations that allow onsite credit applications and approval. Some payday loan services may also be available through online lenders. To complete a payday loan application, a borrower must provide paystubs from their employer showing their current levels of income. Payday lenders often base their loan principal on a percentage of the borrower’s predicted short-term income. Many also use a borrower’s wages as collateral. Other factors influencing the loan terms include a borrower’s credit score and credit history, which is obtained from a hard credit pull at the time of application.
Terms: Asset: An item of a tangible or intangible nature that has value or benefit, such as the capacity to generate revenue or interest. An example of a tangible asset is real estate and an intangible asset is a business brand name.
Encumbered asset: An item of value used as collateral or security for a loan, which has a registered interest against it, for example a property for which you have a mortgage is an encumbered asset. An unencumbered asset is one without any debt or interest registered against it, such as property for which you have paid off the mortgage.
For our finnish readers here is a resource that you might find useful : Payday loans explained. Margin call: An amount requested by a lender when the value of a loan is too high compared to the value of the collateral or security the borrower has offered. This is related to the loan to value ratio. This generally relates to loans used to purchase shares.
GAAP: As a new investor, it’s important to know the distinction between like measurements because the market allows firms to advertise their numbers in ways not otherwise regulated. For instance, often companies will publicize their numbers using either GAAP or non-GAAP measures. GAAP, or Generally Accepted Accounting Principles, outlines rules and conventions for reporting financial information. It is a means to standardize financial statements and ensure consistency in reporting. When a company publicizes its earnings and includes non-GAAP figures, it means they want to provide investors with an arguably more accurate depiction of the company’s health, like removing one-time items to smooth out earnings. However, the further away a company deviates from GAAP standards, the more room is allocated for some creative accounting and manipulation (like in the case of EBITDA). When looking at a company publishing non-GAAP numbers, new investors should be careful of these pro-forma statements, as they may differ greatly from what GAAP deems acceptable.