Understanding a Credit Card
Credit card terminology for personal finance.
A yearly fee that may be charged for having a credit card.
Annual percentage rate (APR)
The cost of credit expressed as a yearly interest rate.
The act of transferring debt from one credit card account to another.
The person or organization that is receiving money from a lender.
A loan which the borrower must repay the amount in a specified number of equal payments.
When goods, services, or money is received in exchange for a promise to pay a definite sum of money at a future date.
An individual's ability and willingness to pay the money back.
A form requesting information about a person's ability to repay credit.
Pre‐approved credit which can be used for the purchase of goods and services now and payment of them later.
When a lender does a comparison of information on a credit application to information on a credit report.
The maximum dollar amount that can be charged to a credit card.
A record of a consumer's credit history that includes information about credit card use as well as the use of other types of credit.
A number that summarizes an individual's credit record and history.
A plastic card which looks like a credit card but is electronically connected to the cardholder's bank account.
The price of money.
The APR charged during the credit card's introductory period after a credit card account is opened.
Late payment fee
Fee charged when a credit card holder does not make the minimum monthly payment by the due date.
The person or organization who has the resources to provide a borrower with a loan.
Extended as a line of credit established in advance so that the borrower does not have to apply for credit each time new credit is desired. Examples of this kind of credit include credit cards.
Fee charged if the credit card account balance goes over the set credit limit.
The interest rate charged on new transactions if the penalty terms in the credit card contract are triggered.
Displays the main costs of a credit card in a credit offer.
An APR that may change depending on other factors, such as the prime rate.
Businesses hired by lenders to pursue payments on debts that borrowers have not paid back according to the terms of the credit contract.
A person who is equally responsible for paying back debt under the credit terms.
A record of the borrower's past loans and credit-related transactions.
Credit Reporting Agencies
Agencies that create credit reports based on the information they receive from lenders regarding a borrower's account history with that lender. Sometimes called credit bureaus.
When a borrower fails to keep up with mortgage payments and the lender takes possession of the property.
A legal claim by a government entity to take an individual's property or income when their taxes are not paid in full.
Often pre-approved, this includes the fine details of a credit agreement including rates, fees and other disclosures. The Schumer Box is included in this.