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Glossary of Credit Card Terms
Here are terms you may find helpful
Annual Fee: Various card issuers charge an annual fee, which can help
offset costs that issuers incur in maintaining accounts and providing services.
Annual Percentage Rate (APR): Sometimes called the Annual Interest Rate.
The yearly interest rate or percentage that you pay on an outstanding balance in
the form of interest and fees.
Association for Payment Clearing Services (APACS):
the banking industry body that oversees money transmission and payment clearing
activities in the UK
Automated Teller Machine (ATM): Lets you perform banking transactions
anywhere and at anytime. By using a debit or ATM card at an ATM, you can
withdraw cash from cheque (current accounts) or savings accounts, make a deposit
or transfer money from one account to another or perform other functions. You
can also get cash advances using a credit card at an ATM. You should also be
aware that many banks charge transaction fees for using another bank's ATM.
Cash Advance: You can obtain cash on the spot by using your card at a
bank or an ATM which displays the MasterCard logo. The amount of the cash
advance is deducted from your available credit line or funds on deposits. A fee
is often charged when obtaining cash advances. In addition, the interest rate
may be higher than on purchases and there is typically no grace period. (A cash
advance is different from a withdrawal you make with your ATM card.)
Credit History: A record of how you have paid accounts in the past; used
as a guide to determine whether you're likely to pay accounts on time in the
future.
Credit Line/ Line of Credit: Also referred to as your credit limit. This
is the maximum amount you can borrow using your card.
EMV: The industry abbreviation for the consortium of three companies
who created a joint working group in 1994 (Europay International, MasterCard
International, Visa International) jointly sponsoring the global standard for
electronic financial transactions. It also refers to the technical
specifications produced by that consortium and adopted by all three companies
designed to ensure the global interoperability of chip cards, chip terminals,
financial messages and related services.
Finance Charges: The price paid to a lender for the use of borrowed
money. Interest is charged as a percentage of your outstanding balance
(purchases and charges reduced by payments or credits posted). This percentage,
or interest rate, can vary from card to card.
Fixed Rate: A set APR that does not change in response to interest rate
changes and conditions. A Variable Rate periodically goes up or down based on
fluctuations in market interest rates as reflected in a published index (e.g.,
the Bank base lending rates published in the Financial Times and other
newspapers).
Grace Period: The time - usually 20-25 days - when you're not charged
interest for purchases you've made. For example, if the billing date on your
credit card bill is May 1 and you have paid your prior balance in full, you may
have until May 20 to pay your new balance in full. If you do, you will not be
charged interest. If your payment arrives after May 20 - or if you don't pay the
entire balance - you may be charged interest from the date of purchase as
posted. Some accounts have no grace period, which means interest is charged on
purchases from the date they are posted.
Introductory Period: The period during which the Introductory Rate
applies to balances outstanding on your account.
Introductory Rate: A special APR that applies for only a limited time.
Merchant: Location or store where purchases are made.
Online Banking: Online systems enable you to access a host of banking
services from a personal computer by connecting with the bank's computers over
the Internet.
PIN: Personal Identification Number: Secret code you choose for your card
that enables you to access your money or perform banking transactions through
the ATM as well as make purchases without signing a sales receipt at merchants
that have PIN pads. Don't share your PIN with anyone.
Rewards Program: A point accumulating program based on purchases or
transactions made on your card. These points can be redeemed for the particular
program you enrolled in (e.g. airline, hotels, etc.). Banks may charge annual
fees to participate in a rewards program.
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