Vocabulary

• Credit Card – A plastic card issued by a bank or business allowing the holder to purchase goods or services on credit.
• Annual Percentage Rate (APR) – The yearly interest rate charged on outstanding credit card balances.
• Credit Limit – The maximum amount that a credit card company allows someone to borrow.
• Balance Transfer – A transaction where debt is moved from one credit card to another.
• Cash Advance – A service provided by credit card issuers that allows cardholders to immediately withdraw a sum of cash, often at a high interest rate.
• Minimum Payment – The lowest amount of money that you are required to pay on your credit card statement each month.
• Grace Period – The time during which you are allowed to pay your credit card bill without having to pay interest.
• Late Payment Fee – A charge that applies when you do not pay at least the minimum payment by the due date.
• Credit Score – A number generated by a mathematical algorithm based on information in your credit report.
• Billing Cycle – The period of time between billings for the credit card account, usually 25-30 days.
• Credit Utilization Ratio – The percentage of your available credit that you are using.
• Rewards Program – A program offered by credit card companies where you earn points, miles or cash back for spending money.
• Secured Credit Card – A type of credit card that is backed by a cash deposit made by the cardholder.
• Unsecured Credit Card – A type of credit card that is not backed by a cash deposit.
• Fraud Protection – A service that protects credit card holders against unauthorized transactions.
• Annual Fee – A yearly charge by banks and financial institutions to customers for use of their credit cards.
• Chargeback – A return of funds to a consumer, mainly used in cases of fraudulent activity.
• Default – Failure to repay a credit card debt within the terms of the agreement.
• Credit Card Statement – A detailed report of the activity on your credit card for each billing cycle.
• Interest – The cost of borrowing money, generally expressed as a percentage of the amount borrowed.
• Credit Card Issuer – The bank or credit union that provides the credit card.
• Over-the-limit fee – A fee charged when your balance goes over your credit limit.
• Foreign Transaction Fee – A fee charged by a credit card issuer on a transaction that takes place overseas.
• Co-branded Credit Cards – Credit cards that carry the name of a specific company, offering rewards when you make purchases from them.
• Credit Counseling – Professional guidance provided by organizations to help people deal with their credit problems.
• Debt Consolidation – Combining several loans or debts — typically credit card debt — into one loan.
• Introductory Rate – A low initial rate offered by credit card issuers for a certain period of time after you open an account.
• Penalty APR – The interest rate charged when you violate the terms of your credit card agreement, such as making late payments.
• Pre-Approval – A process where the credit card issuer checks your creditworthiness to see if you qualify for a certain card.
• Prime Rate – The interest rate that commercial banks charge their most credit-worthy customers.
• Revolving Account – A type of credit account that allows the borrower to maintain an ongoing balance and pay a variable amount each month.
• Transaction Fee – A fee charged for certain types of transactions such as cash advances or balance transfers.
• Variable Interest Rate – An interest rate that can change based on an index such as the U.S. prime rate.
• Zero Fraud Liability – A policy that removes all responsibility from the cardholder for fraudulent charges made on their account.
• Credit History – A record of an individual's past borrowing and repaying, including information about late payments and bankruptcy.
• Credit Report – A detailed report of an individual's credit history.
• Creditworthiness – An assessment of the likelihood that a borrower will default on his or her debt obligations.
• Due Date – The date by which the minimum payment must be made to avoid late fees.
• Finance Charge – The total cost of borrowing, including interest and fees.
• Installment Credit – A type of credit that is repaid with a fixed number of equal payments.
• Credit Inquiry – A request by a legitimate business to check your credit.
• Credit Line – The amount of credit that a financial institution extends to a client.
• Debt-to-Income Ratio – A personal finance measure that compares the amount of debt you have to your overall income.
• Fixed Interest Rate – An interest rate that does not change over the life of a loan or other form of credit.
• Identity Theft – The fraudulent acquisition and use of a person's private identifying information, usually for financial gain.
• Credit Freeze – A measure taken to prevent creditors from accessing your credit report.
• Credit Monitoring – A service that monitors a consumer's credit reports for signs of possible fraud.
• Credit Repair – The process of improving or rehabilitating one's financial reputation among creditors.
• Credit Card Agreement – A document that outlines the terms and conditions for using your credit card.
• Credit Cardholder – The person to whom a credit card is issued.