- 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.
- Primary account holders can choose to add authorized users to an account. Authorized users can make purchases and obtain account information, but they are not liable for making payments.
- 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 higher standard 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.
- Bankruptcy
- A legal status of a person or business that cannot repay its debts. Bankruptcy proceedings can either clear the debt by liquidating assets to pay the debts or by creating a repayment plan.
- 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 relationship and obligations and rights of each of the parties.
- 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. The APR that applies to cash advances is typically higher than the rates that apply to other balances.
- CID (Card Identification Number)
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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 debt to income ratio, past payment behavior, types of accounts, age of accounts, and other information. Each credit bureau has different formulas.
- 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.
- Default
- When a customer doesn’t make a required payment to a credit card account by the payment due date, 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 on certain balances.
- 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 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
- 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.
- 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 standard APR/interest rate will apply.
- Late Payment Fee
- A fee charged when a payment has not been received by the payment due date.
- 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 and it will take you longer to payoff your 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.
- PIN (Personal Identification Number)
- A security code that the customer uses with debit and credit cards to authorize cash advances or other transactions.
- Pre-Screened
- 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.
- 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.
- Rewards
- 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 pre-screen your credit eligibility for the card.
- Zero Balance
- When your billing statement shows no outstanding balance and no new charges have been incurred.
Glossary
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