Understanding the Lingo That Matters to You
All you want to do is the right thing with your money. But big banks can make it so hard.
Bankers use big words and abbreviations that most people really don’t understand. And when you don’t understand something, it’s easy to make a mistake or to shut down altogether.
At The Ashland Community Credit Union, we created this cheat sheet to help you figure out what the heck everyone in the financial world is talking about. Big corporate banks might like to keep you in the dark. But we think it matters that you fully understand your options, and can make great decisions based on clear facts.
So here goes. Let’s break down some common banking terms and why they matter to you:
APY (Annual Percentage Yield)
What it is: APY is the annual return you can expect to earn on your deposit accounts.
Why it matters: If you're saving money, APY shows how much your balance will grow over time. The higher the APY, the more interest you'll earn.
How to use it: Look for a high APY compared to access to the savings.
APR (Annual Percentage Rate)
What it is: APR is the annual interest rate you'll pay on credit cards and loans, like auto loans or debt consolidation loans. It includes fees and additional costs.
Why it matters: A lower APR means less interest paid over the life of the loan.
How to use it: Shop around. Every percentage point represents real dollars.
Beacon Score
What it is: We call it your Credit Score. It’s a number you earn based on credit history.
Why it matters: The simple fact is, a higher credit score can make it easier to qualify for loans, credit cards, and even better interest rates.
How to use it: Don’t listen to the big banks! Join us at the Ashland Community Credit Union instead of letting others treat you like a number. We understand that sometimes bad things happen to good people, and so we are here to help. In fact, if you think you won’t qualify, let us try!
Money Market Account
What it is: A money market account is a type of savings account, but with access to your money. Here at the Ashland Community Credit Union, we even have checks available to you to help manage your money more easily
Why it matters: It’s a safe place to grow your savings with higher returns than a traditional savings account, while still being able to spend it when you need it.
How to use it: With a minimum balance, you can use it like a checking account, that pays interest!
CD (Certificate of Deposit)
What it is: A CD is a savings account with a fixed interest rate and fixed term. A CD is different than a Money Market account in that you leave your money in the account for a certain period.
Why it matters: CDs are a great way to lock in a higher interest rate for the longer term.
How to use it: If you’re saving for something in the future, a CD is a perfect solution.
Debt Consolidation Loans
What it is: Sometimes credit card bills pile up, with high interest rates. And if you’re late, the fees get added on top. A debt consolidation loan rolls up to $10,000 of high-interest debt into one lower-interest loan.
Why it matters: It can be a fresh start to get your finances back on track. Collection calls should stop and you’ll save a lot of money in interest.
How to use it: You can spread the payments over up to 60 months. That frees up cash flow.
Share Savings Account
What it is: At a credit union, a share savings account represents your ownership in the institution. It works like a traditional savings account, often with competitive interest rates.
Why it matters: As a member of a credit union, your share savings account not only helps you build savings but also symbolizes your stake in the credit union, giving you a voice in its direction.
How to use it: This is your chance to be an owner. Take advantage of your opportunity to have a say in the way things are done at the Ashland Community Credit Union. It’s your money, so your voice matters.
Ultimately, when making banking decisions, it pays to talk with someone who knows. At the Ashland Community Credit Union, we take the time to talk with you and to help you make the best decisions. Still, we hope this guide helps you get a more basic understanding of your options. Whether you're opening a new account, applying for a loan, or simply trying to make the most of your savings, knowing the lingo helps you ask the right questions and make decisions that are best for your financial health.
Here at the Ashland Community Credit Union, we’re large enough to serve, and small enough to care. That’s what being a helpful neighbor is all about.
