Credit Cards Glossary
Definitions of terms commonly used for credit card applications.
A
- Annual Fee
Yearly fee charged by the car issuer for using the credit card.
B
- Balance Transfer
The act of transferring the outstanding balance from one card to another. Balance transfers are often done to take advantage of a lower interest rate.
- Business Credit Cards
Credit cards that are reserved specifically for businesses, from business-for-self to large enterprises.
C
- Cash Advance
The act of withdrawing money from a credit card through a bank, ATM or convenience cheque.
- Cash Back Credit Cards
Credit cards that offer a cash refund based on the total usage of the card.
- Credit Limit
The maximum amount that you can charge to your credit card.
G
- Grace Period
A period of time during which interest is not charged as long as a payment is made before the period is over. It starts at the statement date and ends at the payment due date.
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I
- Interest Rate
A percentage that is applied to your outstanding balance to determine the interest charges payable.
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L
- Low-Interest Credit Cards
Credit cards that carry a low-interest rate. This low interest can be on purchases, cash advances, and/or balance transfers.
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M
- Minimum Payment
The minimum payment that must be made each month in order to keep your account in good standing.
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N
- No Annual Fee Credit Cards
Their name says it all. These credit cards can be used as an emergency fund since they cost nothing to the individual to keep.
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O
- Over-Limit Fee
A penalty fee resulting from charges to the card exceeding the credit limit.
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P
- Personal Identification Number (PIN)
A password used to identify the authorized cardholder when making purchases with the credit card.
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S
- Secured Credit Cards
Credit cards that must have a security deposit. These cards are generally meant for people with bad credit or no credit.
- Student Credit Cards
Credit cards that often have features that appeal to students, i.e. student rewards, no annual fees, etc.
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T
- Travel Credit Cards
Credit Cards that offer travel rewards that can be redeemed for discounts on flights, hotels, car rental and other travel-related expenses.
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