Affinity
Card - A card offered in conjunction with an organization
and a credit card issuer. A certain percentage of the finance
charges generated from cardholders are donated to the charity
or organization featured on the card.
Air
Miles - Miles that can be used for free travel or
other discounts, and are earn each time you use your card. Most
major U.S. Airlines offer these cards. Airline Miles are often
referred to as Frequent Flyer Miles.
Annual
Fee - A fee charged by the card issuer for being
a card holder. This type of fee is most commonly associated
with frequent flyer credit cards or cards designed to help you
rebuild your credit.
Annual
Percentage Rate (APR) - The yearly percentage rate
of the finance charge. The annual percentage rate will be a
fixed or variable rate. See "Fixed Rate" or "Variable Rate"
for descriptions.
Average
Daily Balance - The average account balance for a
billing cycle. Your finance charge will be based on this balance.
You can figure out your average daily balance by adding the
balances of each day of the cycle together and then divide them
by the number of days in the cycle.
Balance
Transfer - The act of transferring the whole or partial
balance of one credit card to another credit card. This is usually
done if the balance is being transferred to a card with a lower
annual percentage rate.
Balance
Transfer Fee - A fee that may be charged to cardholders
for transferring a balance from one card to another.
Billing
Cycle - The days between the last statement and the
current statement. Billing cycles generally range from 20 to
32 days.
Cash
Advance - Obtaining cash from the card instead of
using it to make a purchase. The Grace Period does not apply
to cash advances. See "Grace Period" for more information.
Cash
Advance Fee - A fee charged for using your card to
obtain cash. The fee will be a percentage of the transaction
or a flat fee. Higher interest rates generally apply to cash
advances.
Charge
Card - Different from a credit card as they generally
have an annual fee and require the balance to be paid monthly.
Classic
Card - The Visa version of a basic credit card. Generally
has a lower credit limit. The MasterCard version is a Standard
Card.
CO-Branded
- A card usually offered in conjunction with a major merchant
and a credit card issuer.
Debit
Card - A card issued by the cardholder's bank that
may be used to make purchases or get cash from ATMs. Each purchase
will deduct money from the cardholder's checking account and
works much like a check.
Fair
Credit Billing Act - An Act passed by Congress in
1975 to help cardholders resolve billing problems with issuers.
The Act gave cardholder certain rights when dealing with credit
card issuers. Click to View the Fair Credit Billing Act. **link
that to the Fair Credit Billing Act Page**
Finance
Charge - The amount of interest charged to an account
for the billing cycle.
Fixed
Rate - A fixed annual percentage rate of the finance
charge.
Frequent
Flyer Miles - Miles that can be used for free travel
or other discounts, and are earn each time you use your card.
Most major U.S. Airlines offer these cards. Frequent Flyer Miles
are sometimes referred to as Airline Miles.
Gold
Card - A credit card issued by issuers that may include
added benefits not offered with a Classic or Standard credit
card. The credit line is generally between $2,000 and $5,000.
Grace
Period - The time allowed to pay your balance without
being charged a finance charge. Usually 25 to 30 days.
Interest
Rate - The yearly percentage rate of the finance
charge. The interest rate will be a fixed or variable rate.
See "Fixed Rate" or "Variable Rate" for descriptions. The Interest
Rate is also known as the Annual Percentage Rate (APR).
Introductory
Rate - A low interest rate offered for a limited
time, usually for the first 3 to 6 months on being a cardholder.
Commonly known as a "Teaser Rate" for persuading cardholders
to apply.
Late
Payment Fee - A fee charged to a cardholder's account
once a payment is overdue.
MasterCard
- An institution that lincenses it's brand to member banks for
use on credit cards and other products.
Minimum
Monthly Payment - The minimum amount of the balance
a cardholder is required to pay to keep the account in good
standing.
Over
Credit Limit Fee - A fee charged if your balance
exceeds your credit limit.
Periodic
Rate - The interest rate of a specified period of
time, usually referred to as a monthly periodic rate or daily
periodic rate.
Pre-Approved
- A person who has passed the preliminary screening for the
credit card. The person will still need to have their credit
checked.
Platinum
Card - Usually offered to people with higher incomes
and a good credit history. This card has a minimum credit limit
of $5,000 and may include member benefits.
Prime
Rate - The lending rate set by the Federal Reserve
to banks. Currently 9.5%
Rebate
Card - Allows a cardholder to earn points or money
to get cash, merchandise, or services for using the card.
Secured
Card - A card that is secured by a savings account
opened with the issuer. The card is designed for people who
are looking to rebuild their credit, but are having trouble
getting an unsecured card. See "Unsecured Card" for details.
Standard
Card - The MasterCard version of a basic credit card.
Generally has a lower credit limit. The Visa version is a Classic
Card.
Titanium
Card - Usually offered to people with higher incomes
and a good credit history. This card has a credit limit above
the Platinum level and may include member benefits.
Truth
in Lending Act - A law requiring lenders to provide
information giving borrowers the ability to compare one loan
to another.
Unsecured
Card - A credit card that is not secured by collateral.
Unsecured cards are the majority of cards issued.
Variable
Rate - A rate that can increase or decrease with
the changes of the Prime Rate or London Interbank Offer Rate
(LIBOR).
Visa
- An institution that lincenses it's brand to member banks for
use on credit cards and other products.
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