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Credit Cards Glossary

Definitions of terms commonly used for credit card applications.

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Credit Cards Terminology

A | B | C | G | I | L | M | N | O | P | S | T |

A

  • Annual Fee
    Yearly fee charged by the car issuer for using the credit card.

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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.

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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.

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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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