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Money Glossary - A

A, B, C, D, E, F, G, H, I, L, M, P, R, S, T, U, V, Y



Money terms defined on this page:
For a full glossary list click here



AER

What the interest would be if it was paid and compounded yearly instead of monthly. This is normally used for savings and investments rather than credit cards, as it shows the return you can expect to see over time.
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Affinity cards

These are normal credit cards on the surface, but they are connected to a particular business or organisation – normally a charity, political party or other institution. When you use the card, a certain percentage or your spend goes towards that organisation. They will normally be a MasterCard or Visa, and will be accepted worldwide.
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Annual fee

Some credit cards charge an annual fee and some don’t. Many consumers make the mistake of assuming an annual fee is a rip-off, but you should take every aspect into account – the fee might significantly lower your APR.
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Applied interest rate (credit cards)

This is the interest rate (normally APR) that you’re offered by a credit card company. It may be higher or lower than the ‘typical’ rate advertised, as it must take into account all aspects of your financial reliability (see ‘credit assessment’).
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Applied interest rate (loans)

This is the interest rate (normally APR) that you’re offered by a lender. It may be higher or lower than the ‘typical’ rate advertised, as it must take into account all aspects of your financial reliability (see ‘credit assessment’).
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APR

Annual Percentage Rate - the percentage of interest you’ll pay over the course of a year. This means that if, for instance, your APR is 12%, you’ll pay 1% per month.
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APR for balance transfers

Check your small print for the transfer APR (the interest you pay on the debt you transfer from another card) – it may be different from the purchase APR (the interest you pay on the things you buy). This is most often the case when the credit card offers an interest free period, which may apply to transfers but not purchases.
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APR for purchases

Check your small print for the purchase APR (the interest you pay on the things you buy) – it may be different from the transfer APR (the interest you pay on the debt you transfer from another card). This is most often the case when the credit card offers an interest free period, which may apply to transfers but not purchases.
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Arrangement fee

This is a charge made by some credit card and loan companies when you make an application, to take care of administrative costs. It should be incorporated into your budget along with interest rates.
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