U.S. Money Glossary: Key Terms and Acronyms Explained

U.S. personal finance is full of acronyms. Here are the most common ones, explained in plain language, in alphabetical order.

A–C

APR (annual percentage rate): the yearly cost of borrowing, including interest and certain fees. Use it to compare loans and cards. Lower is better.
APY (annual percentage yield): what you earn in a year on savings, including compound interest. Higher is better.
Authorized user: someone added to another person’s credit card who may benefit from its history.
Bankruptcy: a legal process to erase or restructure debts you can’t pay.
CD (certificate of deposit): a fixed-term deposit with a fixed rate; withdrawing early means a penalty.
CFPB: the Consumer Financial Protection Bureau, the federal agency that protects consumers from banks and lenders.
Cashier’s check: a check guaranteed by the bank.
Checking account: your everyday account for paychecks, bills and your debit card.
CPN: a “credit privacy number.” It’s sold as a way to create “new credit,” but using one to apply for credit is illegal. Avoid it.
Credit bureaus: the three companies that keep your credit history: Equifax, Experian and TransUnion.
Credit report: the document with your credit history. You can see it for free at AnnualCreditReport.com.
Credit score: a number that summarizes your credit history.
Credit union: a nonprofit financial institution owned by its members. It often charges lower fees.
Credit utilization: the percentage of your card limits you’re using. Lower is better.

Deductible: the part of an insurance claim you pay before the insurer pays.
Down payment: what you pay upfront when buying a car or home.
FDIC: the agency that insures bank deposits up to $250,000 per depositor, per bank, per ownership category.
FICO Score: the most widely used U.S. credit score, from 300 to 850.
Hard inquiry: a credit check when you apply for a loan or card. It can lower your score a few points for a while.
Installment credit: a loan with fixed payments and an end date, like a car loan.
IRS: the U.S. federal tax agency.
ITIN: an IRS tax number for people who must file taxes but can’t get an SSN.
Money market: either an interest-paying bank account (insured) or a low-risk investment fund (not insured). They’re not the same.

NCUA: the agency that insures deposits at credit unions, like the FDIC does for banks.
Overdraft: spending more than you have in your account; the bank may charge a fee.
Premium: what you pay for insurance.
Remittance: money you send to someone, usually in another country.
Revolving credit: credit you can use, pay off and use again, like a credit card.
Secured card: a credit card backed by a deposit, ideal for building credit.
Soft inquiry: a check that doesn’t affect your score, such as viewing your own credit or prequalifying.
SSN: your Social Security Number.
Tax credit: an amount that directly reduces the tax you owe.
Tax deduction: an amount that reduces your taxable income.
W-2 and 1099: forms showing what you earned in the year — a W-2 if you’re an employee, a 1099 if you’re self-employed or have other income.

Missing a term? Let us know on our contact page. To put these terms to work, read the complete guide to building credit in the U.S.