Debt terminology

  • 1
  • Question
  • Updated 9 months ago
  • Answered
Hey hey,

Here comes the frenchie who does not understand your english terminology :D . Though I understand the phrases, I do not understand the meaning of "Pay in full every month" and "Working to pay off" for a debt. Can somebody help me ? Thanks !
Photo of Lionel

Lionel

  • 17 Posts
  • 4 Reply Likes

Posted 9 months ago

  • 1
Photo of Wayne Woodbury

Wayne Woodbury

  • 233 Posts
  • 179 Reply Likes
Hi, Lionel.  These phrases refer to credit card debt.  "Pay in full every month" means that you pay the full balance of your credit card every month.  If you carry a balance from month to month, then you would be "Working to pay off" the debt.  Does this help?
Photo of K

K

  • 1 Post
  • 1 Reply Like
The terms "pay in full" and "pay off" don't have to refer to credit card debt. Credit cards are just the things to which you are probably most likely to see these phrases refer.
"In full" means "entirely" or "all." "Pay off" means to pay in full. So, if a debt is paid off, that means that all the money that you used to owe to the lender is now back in the lender's possession.
(Edited)
Photo of Wayne Woodbury

Wayne Woodbury

  • 233 Posts
  • 179 Reply Likes
You are correct.  However, the "every month" tacked on to the end implies revolving credit, such as a credit card.  "Working to pay off" could refer to any debt.  Any of these phrases may mean something more specific, of course, depending on the context of where they are printed.  For example, in Goodbudget, if you are looking at adding a credit card account to your list of accounts, it is important to know if you pay the card in full each month, or if you carry a balance that you are working to pay off.  If you pay it in full every month, you would want to set it up as a regular credit card account, but if you are working to pay it off, it would be better to set it up as a debt account so that the outstanding balance is not reflected in your budgeting.