Commonly used credit cared terms
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Transcript of Commonly used credit cared terms
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Credit Card Terms
Annual Fee:
Fee charged by the credit card company to the credit card hold once a year.
Some credit card companies do not charge annual fees.
Balance:
This is what is owed on the credit card
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Credit Card Terms
Annual Percentage Rate (APR):
It's the cost of borrowing calculated per year.
Example:
3% interest is charged monthly
Therefore:
3% x 12 months = 36% annually
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Credit Card Terms Cont....
Cash Advance:
Withdrawing cash against the line of credit on your card.
Always has a higher interest rate and no grace period.
Finance Charge:
Is a fee for the use of credit. It's usually a percentage of the borrowed amount.
This is how the lender makes a profit.
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Credit Card Terms Cont....
Grace Period:
Is the time between a charge is made and the finance charge is added to the balance.
Usually 20-25 days.
Line of Credit:
Is the credit amount available to you on the card.
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Credit Card Terms Cont....
Transaction Fee:
Fees incurred for certain transactions
1. cash advance
2. over-limit charges
3. late payment
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Credit Card Terms Cont....
Arbitration:
This is where parties agree to resolve any disputes outside of court.
This is a settlement method where all parties involved are bound by the decision of the arbitrator.