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Credit card terminology for personal finance.

Annual fee

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.

Balance transfer

The act of transferring debt from one credit card account to another.

Borrower

The person or organization that is receiving money from a lender.

Closed-end credit

A loan which the borrower must repay the amount in a specified number of equal payments.

Credit

When goods, services, or money is received in exchange for a promise to pay a definite sum of money at a future date.

Creditworthiness

An individual's ability and willingness to pay the money back.

Credit application

A form requesting information about a person's ability to repay credit.

Credit card

Pre‐approved credit which can be used for the purchase of goods and services now and payment of them later.

Credit investigation

When a lender does a comparison of information on a credit application to information on a credit report.

Credit limit

The maximum dollar amount that can be charged to a credit card.

Credit report

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.

Credit score

A number that summarizes an individual's credit record and history.

Debit card

A plastic card which looks like a credit card but is electronically connected to the cardholder's bank account.

Interest

The price of money.

Introductory rate

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.

Lender

The person or organization who has the resources to provide a borrower with a loan.

Open-end credit

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.

Over-the-limit fee

Fee charged if the credit card account balance goes over the set credit limit.

Penalty APR

The interest rate charged on new transactions if the penalty terms in the credit card contract are triggered.

Schumer Box

Displays the main costs of a credit card in a credit offer.

Variable-rate APR

An APR that may change depending on other factors, such as the prime rate.

Collection Agency

Businesses hired by lenders to pursue payments on debts that borrowers have not paid back according to the terms of the credit contract.

Co-signer

A person who is equally responsible for paying back debt under the credit terms.

Credit history

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.

Foreclosure

When a borrower fails to keep up with mortgage payments and the lender takes possession of the property.

Tax lien

A legal claim by a government entity to take an individual's property or income when their taxes are not paid in full.

Credit offer

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.

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