A Credit Card Glossary of Terms

The Credit card industry come ups with a batch of jargon. You can’t be expected to recognise all the technical phrases employed and some of them could be very important. Listed below you will happen a quick verbal description of the most common credit card industry related terms and phrases.

Affinity card
A credit card that brands a contribution to a charity of your pick based up on how much you spend. In most cases it's best to avoid a charity that encourages you to subscribe up for such as a card. Chances are such as a credit card have a higher interest rate than the standard. Don't allow guiltiness cloud your judgement.

APR (Annual Percentage Rate)
calculated annual this is your overall interest rate presented as a percentage of your credit card balance.

ATM (Automated Edward Teller Machine)
A cash machine. Utilized to retreat money direct from your credit card, although in general a fee will also be charged.

Balance transfer
When you transfer your debt ‘balance’ from one credit card to another. The usual ground for this is to seek and maintain as much debt as possible on a lower-interest card.

Credit limit
Your credit bounds is the upper limit amount you can pass or retreat on your credit card. Spending beyond your credit bounds will ensue in your card no longer being accepted, and you being charged an over-limit fee.

Fixed rate
A fixed rate credit card is one which bespeaks that you are given a fixed rate on mark up which should remain the same for the time period you have got the credit card. In pattern though interest rates can be changed for almost any reason.

Grace period
The saving grace clip clip period is the amount of time between your disbursement with the credit card and the time when you begin paying interest on that spending. The best credit cards can have got got a saving grace time period of up to two months, poorer cards may not have one at all.

Minimum payment
The minimum payment is the lowest amount you can pay back to the credit card company each month. You always seek to pay more than although this is not necessary. Paying only the minimum amount you are not paying back the money borrowed but only the interest. Minimum payments are usually around 2% of your balance.

Sub-prime
Somes phrase used in the finance industry to depict clients who are a bad credit risk, but are considered worth lending to as the bad credit hazard allows the finance company to charge higher fees.

Teaser rate
A ‘special offer’ low rate. You will see many offers with “LOW 4.9% APR” inch the newspaper headline followed by “for first six months, 21.9% thereafter” inch the small print. Teaser offers can sometimes be deserving taking, but not if they bind you in for longer than the time period of the offer.

Variable rate
An interest rate that is calculated by adding a figure to the current alkali rate. Taking this option will allow your credit card to be affected by changes in national interest rates – a good thought if you believe they might travel down, and a bad 1 if they’re on the manner up.