Glossary of common credit card terms

Annual Fee
A fee charged by the card issuer for being a card holder. Most commonly associated with frequent flyer credit cards and cards designed to rebuild your credit.

Annual Percentage Rate-APR
The yearly percentage rate of the finance charge. The annual percentage rate can be a fixed rate or variable rate.

Average Daily Balance
The average account balance for a billing cycle. Your finance charge will be based on this balance.

Balance Transfer
Transferring the whole or partial balance of one credit card to another credit card.

Balance Transfer Fee
Fee charged to cardholders for transferring a balance from one card to another.

Billing Cycle
The days between the last statement and the current statement.

cash advance
Obtaining cash, normally from an ATM, instead of using the card to make a purchase.

cash advance Fee
Fee charged for using your card to obtain cash. The fee will be a percentage of the transaction or a flat fee.

Debit Card
A card issued by the cardholders bank that can be used to make purchases or get cash from ATM's. Each purchase will deduct money from the cardholders checking account and works like a check.

Finance Charge
The amount of interest charged to an account for the completed billing cycle.

Frequent Flyer Miles
Miles that can be used for free travel or other discounts. These are earned each time you use your card.

Grace Period
The time allowed to pay your balance without being accessed a finance charge.

Interest Rate
The yearly percentage rate of the finance charge. Also known as the APR.

Late Payment Fee
A fee charged to a cardholders account when a payment is overdue.

Minimum Monthly Payment
The minimum amount of the balance a cardholder is required to pay.

Over Limit Fee
Fee charged if your balance exceeds your credit limit.

Secured Card
A card that is secured by a savings account opened with the issuer. The card is designed for people who have bad credit or looking to rebuild their credit.

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