Debt Free Article

Debt Terms Glossary

Letter C

Call

See Option.

Capital gain or loss

This is the difference between the price at which someone purchases an investment and the price at which they sell it. Adding the capital gain or loss to the income received from the investment yields the total return. When an asset has been held for longer than one year, the gain or loss is said to be long term assets owned for a period of time less than one year produce short term gain or loss.

Certificate of deposit (CD)

This is a very common term in the world of debt and investments. CDs are short to medium term instruments (ranging from one month to 5 year maturity) that are issued to you from your bank or savings and loan that pay a rate of interest to you that is larger than that paid by a regular savings account. Be aware of early withdrawal fees with these. CDs are meant to be purchased and left alone until they mature.

Charting

In the world of debt, this a term used commonly to describe technical analysis. Your investment broker or financial planner may chart your future fro debt free purposes or for your financial security.

Churning

This is something we want our debt free readers to watch out for. Churning is excessive purchasing and selling in a customer’s account undertaken to generate commissions for the broker.

Closed end fund

A closed end fund is a type of mutual fund or other investment company that issues a specific amount of shares, then no more. Some of our debt free advocates have these funds. These fund shares trade just like other stocks on the stock exchanges.

COBRA

This is a common term that many of our out of work debt free readers are familiar with. Short for Consolidated Omnibus Budget Reconciliation Act, COBRA is something the gov’t came up with to aid out of work individuals and their families regarding healthcare. Federal law states that if an individual leaves a job that provided health insurance, that individual has the right to continue with those benefits for an additional 18 months after leaving as long as that individual pays the premium and administrative fee. The law does not cover companies with fewer employees than twenty, workers at churches, the gov’t of a US territory, or the District of Columbia.

Cold calling

We mentioned this term previously in the definition of boiler room. This is the practice of salespeople making unsolicited phone calls to individuals on lists they purchase or borrow in the attempt to create more business. Many of our debt free readers get these calls all the time due to being on some debt consolidation or other type of list that is not protected by privacy law. This is not the way to invest or get debt consolidation or any other type of financial service. Cold calls are not specifically based on a person calling to help you specifically.

Commercial paper

This is a common term for short term IOUs issued by companies without collateral. They are purchased in large amounts by money market funds.

Common stock

This is the most basic type of share ownership in a US corporation. Owners of common stock are entitled to all the risks and rewards that go along with owning a piece of the company. In case of bankruptcy, common stockholders’ claims on company assets rank behind the claims of bondholders. (see preferred stock in our debt terms glossary as well).

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