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.
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.
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.
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.
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.
See service fees.
A credit score developed by the Fair Issac Corporation used to determine a borrower's level of risk.
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.
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.
An incentive in the form of points awarded to the borrower for using credit which can be exchanged for merchandise or rebates.
Credit card programs issued by creditors which offer reward points or cash-back incentives to borrowers for making purchases using their card.
Debt in which your monthly payment fluctuates based on how much you spend or pay off each month.
A monetary exchange made from one account to another by phone.
An amount charged in addition to the interest rate for each type of transaction a borrower makes.
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.