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What is a Billing Statement?

Billing Statements are primarily used by credit card companies, listing the transaction history and balance due on a customer account. A billing statement is mailed, physically or electronically, to a customer at the end of a billing cycle, which is usually monthly. The statement will show the balance due and the transaction history, perhaps including recent payments received from the customer. The term “billing statement” is sort of a blend between two distinct documents: a bill and a statement. Continue reading...

Who is a Bill Collector?

Who is a Bill Collector?

Collections companies are known as Bill Collectors, and their jobs are to extract as much payment from those who are past-due on payment obligations as they can to settle an account or to bring it current. When people do not pay their credit card companies back within about 150 days, the card company will pass the debt off to a collections company. Other businesses who do their own billing will also sometimes find it necessary to pass off the obligation to the collections company. Continue reading...

What is Account Settlement?

Settling an account is laying all outstanding business on an account to rest. Account settlement is an idea that can take a few forms. Settlement is when acceptable “consideration” (compensation or pay) has been provided and both parties agree that the matter is settled, resolved, and no further debts or obligations exist for that item of business. Many people have heard the term “settlement” with regards to legal matters, in which the defendant pays off the plaintiff before an actual trial and usually can avoid officially admitting guilt. Continue reading...

What is Bad Credit?

What is Bad Credit?

Bad credit implies that an individual or business has a low credit score or rating. Credit histories are reported and kept in publicly accessible databases. FICO (Fair Isaac & Company) is a credit rating institution that gives individuals a credit rating score based on reported credit histories. Scores range from 300-850, generally, but they also issue ratings based on auto loans and credit cards, which are on a scale from 250-900. Continue reading...

What is a Credit Crunch?

A credit crunch is when access to liquidity dries up dramatically in rapid fashion, or becomes less accessible due to a spike in borrowing rates. Central banks will often step-in to try and curb the lack of liquidity by offering the markets access to cash at lower than market rates, in the event of a crisis. Perhaps the most famous credit crunch in history occurred in late 2007 and early 2008, when bank balance sheets became highly leveraged overnight due to mark-to-market accounting rules that were applied to the mortgage backed security portfolios on their balance sheets. Continue reading...

What is a Debt Settlement Company?

A debt settlement company is a company who specializes in helping people with overwhelming debt settle with their creditors. Debt settlement companies can help individuals with debt issues settle with their creditors for less than they owe. Of course, this will give the individual’s credit score a significant dent that stays on public record for seven years, but at least it gets people out from under their crushing debt. A settlement company will attempt to negotiate a settlement deal on your behalf with one or all of your creditors. Continue reading...

What is a Letter of Credit?

A letter of credit is a provided by a bank or financial institution on behalf of a borrower or buyer, to ensure the seller that payments will be made on time and in full. In the event that the buyer is unable to make payment on the purchase, the bank will have to step-in to cover the full or remaining amount of the purchase. Letters of credit are often used in international transactions to guarantee that payment will be received. Continue reading...

What is Credit Debt?

Credit debt or credit card debt is a type of consumer debt that is incurred through a short-term revolving loan facility. The most common of course is a credit card company issuing a card to a client to make purchases, with the client being responsible for minimum payments plus whatever interest rate applicable. Removing credit card debt from one’s balance sheet is often an effective way of improving your financial life. Continue reading...

How Do You Sell Bitcoin?

How Do You Sell Bitcoin?

There are several (and a growing number) of ways to sell your bitcoin and/or convert it to cash. While many people treat bitcoin as an investment tool rather than a currency, it arguably remains more liquid than some investments with similar volatility. Exiting your position in bitcoin when you desire, at least for now, can be a convenient and fairly easy process. Many exchanges exist online that can help you convert bitcoin into any currency you would like.  These function much like other currency exchanges in the world, but you should be careful to use one you believe is trustworthy.  Researching the topic on social platforms that demonstrate trust through upvoting, such as Reddit, may help you learn more about what other people believe to be good ideas. The landscape is frequently changing, so finding up-to-date information is key. Continue reading...

What Can You Buy with Bitcoin?

What Can You Buy with Bitcoin?

With every day that passes, bitcoin is becoming a more usable and accepted form of payment for a variety of goods and services, even those in the mainstream economy. To be sure, it’s arguably a long way off from being able to use bitcoin for small purchases at your local coffee shop or for big purchases like buying a house, but it is not unfathomable. The financial company Visa (ticker: V) has been working with bitcoin wallet services and various cryptocurrency exchanges to make cryptocurrency debit cards easy to acquire and use. These cards are known by names such as the Shift Card, Bitwala, BitPay, and others, partially depending on the region of the world in which they can be used. These cards allow users to transfer funds from Bitcoin wallets and immediately convert them into spendable fiat currency wherever Visa debit cards are accepted. Customers can also withdraw national currencies from Visa debit ATM machines based on bitcoin and cryptocurrency exchange rates, which often fluctuate wildly. Continue reading...

What is an A-note?

What is an A-note?

An A-note describes a slice of the top tranche of an asset-backed security. Asset-backed securities are categorized into tranches for quality, and an A-note is a share of the best available tranche. Asset-backed securities include Collateralized Mortgage Obligations (see — CDOs), Mortgage-Backed Securities, Credit Card Debt, and other kinds of cash flows, especially related to debt instruments that have been pooled and sold to investors. This shifts the risk from the lending institution to the underwriters and investors in the asset-backed security. Continue reading...

What are credit derivatives?

What are credit derivatives?

Stemming from the hedging strategy of Credit Default Swaps, an entire speculative derivatives market continues to grow, in which tranches of credit risk and indices are traded. With the ballooning of consumer credit in recent years, it is only natural that a credit derivatives market would follow it. In essence, the risk associated with a loan or bond is separated from the actual asset and is passed on to a counter-party for a premium, and then other market participants become involved, perhaps in the form of futures contracts or other derivatives. Continue reading...

What is Bank Credit?

What is Bank Credit?

Bank Credit is the amount of loaned capital that an individual or business is capable of getting from a bank at a given time. This amount will be based on a series of evaluative metrics such as the total amount of assets an individual has, home equity, income, liquid net worth, work history, credit rating, and so forth. An individual can only borrow so much at a time, and, using these variables, a banker can essentially estimate how much credit could be extended that a given individual at that time. Continue reading...

What are Credit Cards and Which Type of Credit Card is Right for You?

What are Credit Cards and Which Type of Credit Card is Right for You?

In the digital age, credit cards have become more than just a convenience; they're a cornerstone of modern finance. Originating from an unexpected dining mishap in 1949, these financial tools have evolved into global powerhouses, enabling seamless transactions worldwide. But what really lies behind that piece of plastic or metal in your wallet? From the intricate mechanics involving issuing banks, payment networks, and merchants to the diverse types available – rewards cards, store-specific cards, and even secured cards for those building credit – the landscape is vast and varied. Responsible usage can unlock benefits, from building a robust credit history to accessing premium rewards. However, with power comes the need for knowledge. Dive deep into the world of credit cards, understand their transformative impact on economies, and discover how to harness their full potential in our comprehensive guide. Continue reading...

What is a Credit Spread?

Credit Spread is an indication of the default risk perceived in corporate bonds at the current time. The credit spread is the difference between the yield on the safest bonds and the riskiest bonds. How much does it cost corporations to issue bonds, in terms of the yield expected by investors in the current market? Typically, a higher spread indicates a more unstable economy. Buyers of large quantities of bonds tend to insure their purchases, and the cost of the insurance is usually reflected in so-called CDS's (Credit Default Swaps). The more expensive the CDS's are, the more risky it is to purchase the bond. Continue reading...

AAA/Aaa — credit rating

AAA/Aaa — credit rating

AAA — S&P / Fitch Aaa — Moody’s AAA/Aaa rated bond issues have an almost nonexistent chance of defaulting, according to the major ratings institutions that issue the ratings. AAA/Aaa is the highest rating a bond issue or company can get. In the aftermath of the 2008 financial crisis and recession, many companies, and the US Government itself, were downgraded from AAA to AA+. Only two companies in the US still retain the AAA rating: Johnson & Johnson and Microsoft. Continue reading...

B+/B1 — credit rating

B+/B1 — credit rating

B+ — S&P / Fitch B1 — Moody’s B+/B1 is within the range of ratings given to High Yield Bonds, also known as Junk bonds. B+/B1 is the 14th rating rating from the top rating of AAA/Aaa in the scales used by the Big Three credit ratings institutions, which are Fitch, Moody’s and S&P. They evaluate the fundamentals of companies, municipal entities, and their bond contracts to determine how much risk of default is present. The limit for the category of Investment Grade bonds is BBB-, and there are a few categories of BB above B. Continue reading...

B/B2 — credit rating

B/B2 — credit rating

B — S&P / Fitch B2 — Moody’s A bond issue that has a moderate chance of default but a high yield might be given a B2/B rating by the major ratings institutions. Bonds are rated based on their risk of default by the Big Three ratings institutions: Moody’s, Fitch, and S&P. The latter two use the same symbols, so if the algorithms and analysts at the two ratings institutions come to similar conclusions, a company might have the same rating from each of them, such as the “B” in this example. B2/B ratings are the 15th ratings down the scale from the top rating of AAA/Aaa. Continue reading...

B-/B3 — credit rating

B-/B3 — credit rating

B- — S&P / Fitch B3 — Moody’s In the world of junk bonds, a B3/B- rating is about as low of a rating as most investors will venture to explore. Bonds are rated by independent ratings institutions known as the Big Three: Moody’s, Fitch, and S&P. Two companies, S&P and Fitch, use the same symbols, and the B- in this example belongs to them. Moody’s has its own system, and the B3 in this example is theirs. Continue reading...

What is the Investment Advisor Registration Depository (IARD)?

The IARD system is maintained by FINRA, and keeps track of all adviser registrations, which states they are licensed to work in, all licenses they hold, and any customer complaints. It simplified the registration requirements of the Investment Advisers Act of 1940. The Investment Adviser Registration Depository (IARD) was established in 2001 to streamline the registration requirements of the Investment Advisors Act of 1940. The act required that all advisers register with the SEC and the states in which they practice. Continue reading...