Bill and contract words explained
The words on bills, statements and contracts, explained in plain language. Found a word you don’t understand in your own document? Explain the whole thing in seconds.
- APR (annual percentage rate)
- The yearly cost of borrowing money, including interest and some fees, shown as a percentage. A higher APR means borrowing costs more.
- Arrears
- Money that is overdue: payments you were supposed to make but haven’t yet. Learn more
- Auto-renewal
- A setting where a subscription or contract starts a new period automatically unless you cancel by a set date. Learn more
- Balance due
- The total amount you currently owe on a bill or account. Learn more
- Billing cycle
- The period a bill covers, often one month. Charges inside that period appear on the same bill.
- Chargeback
- When your bank or card provider reverses a card payment, usually after you report fraud or a seller doesn’t deliver. Learn more
- Collections
- When an unpaid debt is passed or sold to a company whose job is to collect it. Learn more
- Copay (co-payment)
- A fixed amount you pay for a medical visit or prescription, with insurance paying the rest. Learn more
- Credit (on a bill)
- Money taken off what you owe, often shown with a minus sign. It may be a refund, discount or correction. Learn more
- Deductible
- The amount you pay yourself before your insurance starts paying. Learn more
- Direct debit
- Permission you give a company to take payments from your bank account automatically. Learn more
- Due date
- The last day a payment can arrive without counting as late. Learn more
- Early termination fee
- A charge for ending a contract or lease before its end date. Learn more
- Explanation of Benefits (EOB)
- A statement from a health insurer, mainly in the United States, showing what was billed, what insurance paid and what you may owe. It is not a bill. Learn more
- Grace period
- Extra time after the due date before a late fee or penalty is charged. Learn more
- Installment
- One of several regular payments that together pay for something, like a phone or a loan. Learn more
- Itemized bill
- A bill that lists every service or product separately, with its own price and date. Learn more
- Late fee
- A charge added when a payment arrives after the due date. Learn more
- Minimum payment
- The smallest amount you must pay by the due date to avoid a late fee. Paying only this usually means paying more interest.
- Overdraft
- When you spend more than is in your bank account, often with fees or interest. Learn more
- Phishing
- A fake message designed to trick you into giving passwords, card details or codes, often by copying a real company. Learn more
- A temporary hold on money in your account, for example by hotels or fuel stations, that is released or replaced by the real charge later. Learn more
- Promotional discount
- A lower price that lasts for a limited time. When it ends, the price goes back up. Learn more
- Prorated charge
- A charge for part of a billing period, for example when you change plans in the middle of the month. Learn more
- Regulatory recovery fee
- A fee some phone companies add to cover their costs of following rules. Despite the name, it is usually not a government tax. Learn more
- Security deposit
- Money paid at the start of a lease or service to cover damage or unpaid bills, returned at the end if conditions are met. Learn more
- Smishing
- Phishing by text message, such as fake delivery or toll texts. Learn more
- Statement date
- The date a bill or bank statement was created. It is different from the due date. Learn more
- Surcharge
- An extra charge added on top of the normal price, such as a fuel or card-payment surcharge. Learn more
- Waiver
- When a company agrees not to charge a fee, such as a late fee or activation fee. Learn more
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