| Term | Definition |
|---|
| Annual Percentage Rate (APR) | The yearly rate of interest including the fees and cost paid to acquire the loan |
| Balance Transfer | The process of moving an unpaid credit card debt from one issuer to another. |
| Billing Cycle | The number of days between the last statement date and the current statement date. |
| Billing Statement | The monthly bill sent by a credit card issuer to the customer. |
| Cash advance fee | A charge by the bank for using credit to obtain money. |
| Cardholder agreement | The written statement that gives terms and conditions of a credit card account. |
| Credit Card | A plastic card with a coded magnetic stripe that when used entitles its owners to a revolving line of credit. |
| Credit Limit | The maximum amount that a customer can borrow from the credit card company. |
| Three C's of credit | Character, Capacity, Capital |
| Collateral | Anything used as security for a payment of a debt or performance of a contract. |
| Debtor | A company or indivdual who owes money. |
| Finance charge | The charge for using a credit card comprised of the interest costs and other fees. |
| Identity theft | Occurs when someone uses your personal information, such as your name, social security number, credit card number etc. |
| Lender | Someone who lends money or gives credit cards to obtain cash. |
| Minimum payment | The minimum amount that a cardholder can pay to keep the account from going into default. |
| Periodic rate | The interest rate described in relation to a specific amount of time. |
| Pre-approved | A credit card offer with pre-approved only means that a potential customer has passed the preliminary credit information screening. |
| Secured card | A credit card that a cardholder has secured with a savings deposit to ensure the payment of the outstanding balance if the cardholder defaults on payments. |
| Teaser rate | Often called the introductory rate, it is the below market interest rate. Offered to entice customers to switch credit cards |
| Variable interest rate | The percentage that a borrower pays for the use of money; it moves up or down periodically, based on the other interest rates. |
| Credit Rating | A measurment of the credit worthiness of an individual. |
| Credit Score | A number representing the likelihood that a prospective borrower will fail to repay a loan or other credit in a specific period of time. |
| FICO | Scores are developed by using complex statistical models that associate certain borrower traits with the likelihood of repayment. |
| Prime rate | The interest rate charged by the federal goverment to major banks and other lending institutions. |
| Unsecured Credit Card | A credit card that does not require a bank deposit and usually comes with less restrictions and better terms. |
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