APR (Annual Percentage Rate)
Also known as your interest rate, this interest rate determines the finance charges you pay on your account if you carry a balance.
Authorized User
A way to share a credit card account with another person, authorized users “piggyback” on the credit of the account owner.
Balance Transfer
Transferring an unpaid balance from one open credit account to another. You can save on interest for that balance if you transfer balances to a credit account with a lower interest rate. A promo rate applies for a specific duration, then after expiration usually increases to a purchase rate. A balance transfer fee may apply.
Bad Credit
A term used to describe a poor credit rating. Bad credit can result in higher rates, and getting declined for credit cards, car and apartment purchases. Some common practices that may damage a credit rating include making late payments, skipping payments, exceeding credit card limits or declaring bankruptcy.
A status of consumers or businesses that have been declared unable to pay his or her debts. It also refers to the legal process by which debtors seek federal protection from creditors when the borrower is unable to repay debt obligations.
Billing Cycle
The length of time (typically 28 – 32 days) between your statements.
Cardmember Agreement
A contract between you and your credit card issuer that provides the details of the terms, which is usually called Terms & Conditions.
Cash Advance
Using your credit card and PIN to get cash from a bank or ATM, or by writing a convenience check. Typically, the card issuer charges a cash advance fee for the transaction and begins charging interest from the date you take the cash advance.
CID (Card Identification Number)


The CID is the three-digit number at the far right on the back of your credit card and is also called a card verification (cvv) number. Merchants may ask for the CID to verify that you have the card in your possession at the time you make a transaction.
Credit Bureau
An agency that catalogs and sells information regarding the payment behavior of consumers and issue credit reports with related information. The three major national credit bureaus are Experian, Equifax and TransUnion, but there are others as well.
Credit Limit
Also known as a credit line, a credit limit is the total amount of money that can be charged to a credit card. You can call your bank at any time to discuss your credit line, request for it to be lowered or request for it to be increased based on your spending habits/needs.
Credit Score/Credit Rating
A three-digit number that is calculated by credit bureaus or any other company that shows your creditworthiness using a formula that is formulated by weighing various factors such as employment, income, debt to income ratio and past payment behavior. Each credit bureau has its own formula.
Credit Report
A report compiled by one or more credit bureaus. A credit report details purchase history, all on-time or late payments, credit inquiries and information on any accounts ever opened with credit card companies. Your credit history shows how well you pay your bills on time and how much you may owe to other parties. Credit card issuers use this information to decide whether to provide their customers with credit cards.
Debit Card
A card issued by a bank that directly accesses available funds from a bank account, typically a checking account.
When a customer doesn’t make a required payment to a credit card account, or otherwise violates the terms of the agreement between the credit card company and the customer.
Grace Period
The period of time during which you are allowed to pay your credit card bill without having to pay interest.
Gift Card
Similar to a pre-paid card with pre-loaded funds but it is not linked to a specific bank account and is meant to be used only at a specific merchant.
Hard Inquiry
Occurs when you apply for a line of credit and the lender checks your credit report before making a lending decision. The lender must have permission to conduct a hard inquiry. A hard inquiry can lower your credit score and remain on your credit report for up to two years, so try not to apply for too many loans/credit cards.
Interest Charges
Certain charges that can be incurred when you carry a balance on a credit card. Interest charges include interest costs.
Introductory Rate
A lower APR provided by a credit card company for a limited period of time for purchases and/or balance transfers. Once this rate expires, your normal APR/interest rate will apply.
Joint Account Holder
A way to share a credit card account with another person, sharing ownership of the account and both are liable for repaying the debt.
Late Payment Fee
A fee charged when a payment has not been received by the specified due date. At Discover, there is no late fee for your first late payment.
Minimum Payment
The smallest payment a customer can make each statement period to keep the account in good standing. If you only pay the minimum payment, you will incur interest on the unpaid balance.
Penalty APR
A higher APR the credit card company charges on new transactions, after the customer has made late payments, exceeded their credit line, or otherwise did not abide by the Cardmember Agreement. If you become more than sixty days late, some credit card companies may apply the penalty APR to your existing balance. Discover it cards do not charge a penalty APR.
PIN (Personal Identification Number)
A security code that the customer uses with debit and credit cards to authorize cash advances or other transactions.
A potential customer who meets a credit card issuer’s credit criteria based on information obtained from a credit report. If after the customer responds to a pre-approved offer, the credit card issuer determines that the customer no longer meets the issuer’s credit criteria, credit may not be extended.
Pre-Paid Card
A card that is not linked to a specific bank account, funds are preloaded onto it.
Prime Rate
One type of index that determines the variable interest rate a bank will charge customers.
Some credit cards offer you rewards in the form of rebates, cash back or reward points that can be used to purchase goods and services in exchange for using their credit card.
Secured Card
A type of credit card that requires a deposit as collateral.
Soft Inquiry
Occurs when a company or person checks your credit report, usually as part of a background check. Also, if you’ve ever received a credit card offer in the mail, the lender may have performed a soft inquiry to check if you’re pre-qualified for the card.
Zero Balance
When your billing statement shows no outstanding balance and no new charges have been incurred.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

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