You and Your Money

There are lots of ways to explore banking. One of the best ways to go about it is to make the end goal finding the right kind of banking for your needs. Since needs can change over time, it is helpful to understand how to determine what accounts and services are right for your personal situation and what questions to ask along the way. The resources in this section will provide that framework. However, know that help is available from Boulder County Financial Counselors, who are not associated with any bank and are therefore unbiased in guiding you in selecting your account.

Glossary of Banking Terms

ACCOUNT: A bank account that you use to hold money for a longer time.  The bank will pay you a small amount for the time you keep it in your account.

ACCOUNT BALANCE:  How much money is in your account.

ALERTS:  Sign up for alerts on your bank account to tell you if your balance is low, and on your credit card to tell you if your balance is higher than the amount you select. These email or text alerts can help you keep track of your bank account and your card balances.

ATM: (Automated Teller Machine) A machine that provides basic banking services in a public place without the need for a bank teller.

BANK: A place that looks after people’s money for them and keeps it safe. It also lends money to people to help them buy things like houses and cars.

BANK ACCOUNT:  is the record your bank keeps to know how much money you have.  You can put money in to your account when you want to save, and take it out when you need it.

BILL PAYMENT SERVICES: Use cash, a money order, a bank account, a prepaid card, or another payment method to pay utility, mortgage, or other bills, in person, by phone, through a website, or through a mobile phone application.

BOUNCING A CHECK: The act of writing a check for more money than will be in the account when the check is deposited.

BUDGET: A plan for how you will spend the money you earn. It includes how much money you earn and details what you want to spend your money on and how much you will save.

BUSINESS LOAN:  Borrow money to start or expand a business. Ordinarily, this will be an installment loan with periodic payments due. Equipment or other business assets, or personal assets may be pledged against the loan (collateral).

CAR LOAN:  Borrow money to buy a used or new car. This will be an installment loan. The loan will generally be secured by the vehicle (collateral).

CAR TITLE LOAN: Borrow money against your car, with the car title being held as collateral. If you do not pay back the loan as agreed or renew the loan, the car can be repossessed and sold to cover the debt. The loan amount is often much less than the car is worth.

CERTIFICATE OF DEPOSIT: Deposit a fixed amount of money for a specific amount of time. You pay a penalty to get your money out early. The size of the penalty varies, and could amount to more than the interest you have earned if you withdraw the money before the maturity date. Generally earns more interest than a regular savings account

CHECK: A piece of paper that orders a payment of money.  Items written on a check include the money amount, date, your signature, and the person or company the money will be paid to.

CHECK CASHING:  Turn paychecks, government checks, or personal checks into cash, often for a fee. Get immediate, non-recourse (meaning once you get the funds, you are free and clear) access to funds minus a fee.

CHECKING ACCOUNT:  A bank account that you can take money out of by writing a check or using a debit card. Deposit money in and withdraw money from this account by writing checks or using a debit card. Suitable for frequent transacting. Many checking accounts include access to mobile and online bill pay. Always keep track of your account activity to ensure sufficient balances to cover payments and withdrawals and avoid overdraft fees or bounced check fees.

CREDIT: Your ability to borrow money if you want a loan, line of credit or mortgage.  

CREDIT BUILDER LOAN: Borrow money specifically to build a credit history or improve credit scores.

This may be available at banks or credit unions in your community or through a local non-profit.

CREDIT CARD:  Borrow money up to an approved credit limit. Make purchases using the card or the number and card security code. A minimum monthly payment is required. Will be charged interest on unpaid amounts; can be charged othe fees.

CREDIT UNION:  Similar to a bank, a credit union is a not-for-profit organization that serves a specific group of people.

DEBIT CARD:  A plastic card that can be used to get cash or make purchases at stores and online. A debit card looks similar to a credit card and often has a Visa or Mastercard logo on it.  

DEBT: The money you own when you take on loan or a line or credit

A DEPOSIT: is when you put money IN to your bank account. When you make a deposit, your account balance goes up.

DIRECT DEBIT: Funds sent from your checking account electronically instead of writing a paper check.

DIRECT DEPOSIT: Funds sent to your checking account electronically instead of by depositing a paper check.

FDIC:  (Federal Deposit Insurance Corporation)  Replaces a customer’s money up to $250,000 if a bank loses the money to theft, natural disaster or other circumstances.

INTEREST:  The price you pay to use borrowed money.  ALSO the money you get for funds held in a savings account.  The more money you put in a Savings Account and the longer you leave it there, the more interest you’ll get.

LINE OF CREDIT:  Borrow money up to an approved credit limit. Getting approved for a line of credit is different from a credit card. It may be secured with collateral (such as a home) or be unsecured. May be used for overdraft protection in a checking account.

MOBILE BANKING: Use your smart phone to manage accounts and make payments through your bank or credit union’s website or mobile application.

MONEY ORDER: Buy a money order to pay a business or other party; can be used instead of a check, but it can be harder to prove payment later.

MONEY TRANSFER: Send money from one person or place to another.

MORTGAGE:  Borrow money to build or buy a home. This will be paid back in installments. The home loan or mortgage will be secured by the home (collateral).

NCUA:  (National Credit Union Association) Replaces a customer’s money up to $250,000 if a credit union loses the money to theft, natural disaster or other circumstances.

ONLINE BANKING: Manage your bank or credit union account through a secure website. This option may include a method to pay bills from your account, and is available through many banks and credit unions.

OVERDRAFT:  Spending more money than is available in an account.

PAYDAY LOAN:  Borrow small amounts of money. You provide a check written for some time in the future − generally two weeks, or give permission for the lender to electronically debit your bank account. If you don’t repay the loan and fees in full, the lender can cash the check or process a payment from your bank account. If your account does not have enough money in it to cover the amount, you may have to pay a fee to extend the loan due date (rollover or renew the loan) or take out a new loan for the amount you don’t repay).

PAWN SHOP LOAN: Borrow money against an item that the pawn shop holds during the loan. If you do not pay back the loan as agreed or renew the loan, the pawn shop can sell the item to cover the debt. The loan amount is often much less than the item is worth.

PIN : (Personal Identification Number)  A secret code that you create so that only you can use your debit card to get cash or make purchases.

PREPAID CARD:  A card that you use to access money you have paid in advance

SAVINGS ACCOUNT: Deposit money in and withdraw money from an account; earn interest (currently interest rates are low); build up money for emergencies. Not intended for frequent transacting.

SECURED CREDIT CARD:  Borrow money up to a limit that is secured by a deposit. This deposit acts as collateral if you do not pay the credit card as agreed.

SMALL DOLLAR LOAN:  Loans for small amounts of money. Generally, the loans have to be paid back quickly, and the interest rate and fees are higher than bank or credit union loans or credit cards.

TRANSACTION: Something you do that changes the balance of your account. This can be either a deposit or withdrawal from your account.

A WITHDRAWAL: is when you take money OUT of your bank account. When you make a withdrawal, your account balance goes down.

Bank On Boulder County Brochure