The Vocabulary of Credit Cards
The Vocabulary of Credit Cards
Affinity Credit Card - credit card offered jointly by two organizations, a credit card issuer and a professional association, special interest group or other non-bank company.
Annual Fee - yearly fee paid to use some credit cards.
Annual Percentage Rate (APR) - cost of carrying a balance on a loan for a year, equal to the amount owed in interest each month multiplied by 12.
Available Credit- credit limit minus the current balance.
Balance- total amount of money owed, including any unpaid balance from the previous months, new purchases, cash advances, and any charges.
Balance Transfer - moving balances from one credit card to another.
Bankruptcy - legal declaration of the inability to repay debts, viewed as a last resort.
Billing Cycle - number of days between the last and current statement dates.
Billing Statement - monthly bill from a credit card issuer that shows activity on an account.
Cardholder Agreement - issuer’s written statement of terms and conditions relating to a credit card account.
Cash Advance - instant loan from a credit card account.
Cash Advance Fee - fee for cash advances in addition to normal interest charges.
Charge Card - card requiring full payment of the balance by the due date.
Consumer Credit Counseling Service (CCCS) - non-profit organization that provides free or low cost counseling and guidance to people experiencing financial difficulty.
Co-signer - person who signs a credit card agreement with the primary applicant and is also responsible for repaying the balance of the debt.
Credit bureaus or credit reporting agency (CRA) - company that collects and sells information about how people manage their debts.
Credit Card Debt - total unpaid balances on all credit cards.
Credit History - record of the way people manage their debts.
Credit Limit - maximum amount you may owe on a credit card including purchases, cash advances, finance charges and fees.
Credit Management - way a person handles the money they borrow from banks or credit issuers.
Credit Report - information about how you pay bills and loans, how much credit you have, what your debts are, and other personal information to help lenders decide whether you are a good or bad credit risk.
Credit Score - three-digit number ranging from 300-900, determining your ranking for credit risk.
Debit Card - card allowing purchases to be paid for with funds immediately deducted from your financial account.
Debt - amount of money owed.
Deferred Payment - payment put off to a future date or extended over a period of time.
Delinquent Account - payments have not been made according to the terms and conditions of the cardholder agreement.
Due Date - day a payment is due to a creditor.
Finance Charges - total amount paid to use credit including interest, all fees, premiums, etc.
Fixed Interest Rate - interest rate changing only if the issuer notifies cardholders through an amended cardholder agreement with at least 15 day’s advance notice.
Grace Period - interest-free time between the date of purchase and when that purchase appears on their statement if there’s no outstanding balance on a credit card.
Interest Rate - fee charged for money loaned.
Joint Credit - credit based on the assets, income and credit history of both people applying.
Late Payment - payment received after the due date.
Late Payment Fee - fee charged when a payment is received after the due date.
Minimum Monthly Payment - smallest amount that can be paid by the due date and still meet the terms of the cardholder agreement.
National Foundation for Consumer Credit (NFCC) - non-profit organization dedicated to educating consumers in wise use of credit.
Outstanding Balance - total amount owed on a credit card or loan.
Over-the-Credit-Limit – owing an amount greater than the limit on a credit line.
Over-the-Limit Fee - fee charged for exceeding the assigned credit limit.
Past Due - when the minimum payment has not been received by the due date.
Periodic Rate - interest rate in relation to a specific amount of time.
Posting Date - date that a purchase, cash advance, fee, service charge or payment is recorded.
Previous Balance - total balance due at the end of last billing cycle.
Rebate Card - credit card that supplies benefits based on the card’s usage.
Revolving Credit - credit agreement that allows consumers to pay all or part of the outstanding balance on a loan or credit card and have credit available again as the balance is paid off.
Secured Card - credit card guaranteed by a cash deposit held in a special savings account or certificate of deposit.
Transaction Date - date a purchase is made or cash is withdrawn.
Transaction Fee - charge for credit activities such as using an ATM or cash advance.
Unsecured Credit Card - card not guaranteed by collateral.
Variable Interest Rate - interest rate that changes based on an economic index such as the prime rate.
Zero Balance - total outstanding balance paid with no new charges or cash advances during a billing cycle.
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