Office of Financial Empowerment
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Money Dictionary

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Payday Loan   Payday loans are illegal in New York. A payday loan is a high-interest loan guaranteed by a paycheck. A borrower needs to have a checking account and proof of employment to apply for a payday loan. The process starts with a borrower writing a check to the lender postdated two weeks from the date the loan is taken out. The check amount is the amount borrowed plus a fixed fee. After two weeks, the lender can cash the check or the borrower can redeem it by paying it back in cash. However, if the borrower is unable to pay back the amount, the lender will charge extra fees and/or interest to extend the loan (also known as rolling over the loan). The penalty for not paying on time can be quite expensive as most payday loans are known to have annual interest rates of over 300%.
Personal Identification Number (PIN)   Similar to a password, a PIN allows you to access account information, such as bank savings account, online investment account, child support case, etc.
Phishing   A type of scam in which identity thieves use a false E-mail or Internet address to deceive people into giving out their personal financial information.
Premium Credit Card   A type of credit card that offers higher credit limits and other extra features, such as travel insurance, emergency services, etc. Premium cards are usually called gold, platinum, or titanium cards and there are membership fees involved.
Principal   The original amount of money borrowed. For example, George borrows $1,000 from XYZ Bank. At the end of the month he needs to repay them $1,200. In this example, $1,000 is the principal amount and $200 is the interest and/or fees for borrowing the loan.

OFE's Reference List for Money Dictionary