A   B   C   D   E   F   G   H   I   J   K   L   M   N   O   P   Q   R   S   T   U   V   W   X   Y   Z

A

Adjusted balance
A method of calculating interest which is obtained by using the ending balance from the last billing period less all payments made during the current period.
Affinity cards
A co-branded credit card issued by a credit card marketer on behalf of a membership group which offers its members incentives to use the card.
Annual fee
A flat fee charged by the credit card company which allows a borrower to use their card.
Annual Percentage Rate (APR)
The interest rate reflecting the total yearly cost of the interest on a loan, expressed as a percentage rate. It includes interest as well as other charges. Because all lenders follow the same rules to ensure the accuracy of the annual percentage rate, it provides consumers with a good basis for comparing credit cards.
Automated Teller Machine (ATM)
An electronic banking machine that dispenses cash, accepts deposits, and performs other services.
Average Daily Balance (ADB)
A method of calculating interest which is obtained by taking the daily balance of each day in a billing period, less any payments received, divided by the number of days in the period.
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B

Balance transfer
The credit card balance amount that gets transferred from one outstanding credit card to another.
Billing cycle
The number of days used to calculate interest for that specific billing period. Also referred to as the billing period.
Borrower
A person who borrows money. Also referred to as a consumer.
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C

Cash
Money in the form of paper currency or coins.
Cash advance
Cash borrowed against your credit card balance. The cash advance limit may be lower than your credit limit.
Cash-back incentives (rebates)
A form of reward issued as a rebate check or statement credit by the creditor to the borrower.
Convenience check
Checks issued by a creditor for the borrower to use against their credit line.
Convenience check fee
A fee charged by the creditor for using a convenience check against one's account.
Credit history
A borrower's record of past payment history.
Credit limit
See credit line.
Credit line
The maximum amount that can be charged or accessed on a credit card. Also referred to as the credit limit.
Credit report
A comprehensive report issued by a credit reporting agency which profile's a borrower's credit history.
Credit reporting bureau
One of the three major reporting bureaus (Equifax®, TransUnion®, Experian®) which tracks a borrower's credit history.
Credit score
A statistical method that lenders use to quickly and objectively assess the credit risk of a loan applicant.
Credit
An amount of money due a borrower.
Creditworthiness
A creditor's measure of an individual's or company's ability to meet debt obligations.
Creditor
The credit card company or lender issuing the credit card.
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D

Daily periodic rate
This is the rate that would be used to calculate your monthly finance charge which is obtained by taking the APR divided by the number of days in the year (365).
Default
Failure to make required payments or otherwise meet the terms of a credit agreement.
Default rate (APR)
The APR a borrower is charged for defaulting on a payment.
Delinquency(ies)
A failure by the borrower to make a payment by the specified due date.
Deregulation
The removal of government regulatory controls from an industry, commodity, etc.
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F

FACT Act
The Fair and Accurate Credit Transactions Act passed by Congress in 2003, which entitles a consumer to receive a free copy of their credit report annually from the three main credit reporting agencies.
FCRA
The Fair Credit Reporting Act which took effect in 1971 requires Consumer Reporting Agencies to furnish correct and complete information to businesses wanting to evaluate a borrower's credit.
Fee
See service fees.
FICO® Score
A credit score developed by the Fair Issac Corporation used to determine a borrower's level of risk.
Finance charges
The amount a borrower is charged expressed as a percentage of the APR for carrying a month-to-month balance.
Fixed rate (APR)
A set annual percentage rate that doesn't fluctuate like a variable rate.
Frequent flyer miles
Flight miles that are rewarded by an airline to customers for flying with them.
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G

Grace period
The period of time a borrower is allowed to make a credit card payment without incurring any interest charges.
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H

Hard inquiry
A request by a creditor to see your report which gets triggered by a credit application and gets noted in the inquiries section of the report.
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I

Identity theft
A crime where a thief obtains key personal information to impersonate someone else.
Interest
The amount charged to borrow money.
Interest rate
The yearly price charged by a lender to a borrower in order for the borrower to obtain a loan. This is usually expressed as a percentage of the total amount loaned.
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L

Late payment
A failure to deliver a payment from the borrower before the payment due date.
Late payment fee
A penalty fee that is imposed when a borrower's payment is received late.
Low introductory rate
A special promotional rate that creditors charge on purchases or balance transfers for opening a new account.
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M

Mileage points
The amount of points rewarded by an airline for traveling a specified flight segment.
Minimum balance
See minimum payment due.
Minimum payment due
The minimum payment amount which must be received by the due date in order to avoid a late fee from the creditor.
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O

Online Bill-pay
An electronic method for paying bills online using the Internet.
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P

Penalties
A fee assessed by the creditor for breaching the terms and conditions of your agreement.
Pre-set spending limit
The maximum dollar amount to which a borrower has access through a line of credit.
Previous balance
The ending balance from a borrower's previous statement and starting balance for the current statement.
Principal
The amount of money owed on an outstanding balance excluding interest.
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R

Regular cycle ADB
A method of calculating interest which is obtained by taking the daily balance on each day of that month's billing cycle, less any payments received, divided by the number of days in that billing cycle.
Reward points
An incentive in the form of points awarded to the borrower for using credit which can be exchanged for merchandise or rebates.
Rewards programs
Credit card programs issued by creditors which offer reward points or cash-back incentives to borrowers for making purchases using their card.
Revolving debt
Debt in which your monthly payment fluctuates based on how much you spend or pay off each month.
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S

Secured
A debt which is secured with some type of collateral (e.g., a savings account, automobile, home).
Service fee
A fee charged by a creditor for performing a specific account service.
Soft inquiry
A request to see a borrower's report which gets noted in the inquiries section of the report but doesn't effect one's credit score.
Statement credit
A rewards credit issued by a creditor in the form of a billing credit which is deducted from the balance due amount.
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T

Telephone transfer
A monetary exchange made from one account to another by phone.
Transaction fee
An amount charged in addition to the interest rate for each type of transaction a borrower makes.
Transfer fee
See service fee.
Two-cycle Average Daily Balance (ADB)
A method of calculating interest which is obtained by taking the daily balance on each day of the previous two month's billing cycle, less any payments received, divided by the number of days in that billing cycle.
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U

Unsecured
A debt which requires no collateral.
Utilization ratio
The percentage of a borrower's available credit in use versus the total credit.
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V

Variable APR
An adjustable rate that fluctuates with the movement of some index or the prime rate.
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Z

Zero introductory rate
A special promotional rate that creditors charge borrowers on purchases or balance transfers for opening a new account.
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