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 higher standard rate. A balance transfer fee may apply.
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.
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. The APR that applies to cash advances is typically higher than the rates that apply to other balances.
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.
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.
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.
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 debt to income ratio, past payment behavior, types of accounts, age of accounts, and other information. Each credit bureau has different formulas.
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.
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 a permissible purpose to access your credit report. A hard inquiry can lower your credit score and remain on your credit report for up to two years.
Interest charges are the cost of borrowing money. The interest rate that creditors charge is typically expressed in terms of an Annual Percentage Rate (APR). Different types of transactions can accrue interest in different ways.
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 and it will take you longer to payoff your balance.
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-screened offer, the credit card issuer determines that the customer no longer meets the issuer’s credit criteria, credit may not be extended.
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 pre-screen your credit eligibility for the card.