Credit Card Terminology

Front

Annual Fee

Back

This is the charge from a credit card company each year for use of that credit card. Not all credit cards have this fee.

Front

Balance

Back

The amount of money owed on a credit card account.

Front

Credit

Back

Borrowed money that you can use to purchase goods and services, which you agree to pay back over time. It is a promise to pay someone later.

Front

Credit Card

Back

A payment card where the credit card company pays for an item and allows the customer to pay off the full balance over time, charging interest until paid in full.

Front

Credit Limit

Back

The maximum amount a credit card company allows you to charge on your card, based on your ability to handle debt.

Front

Debit Card

Back

Different from credit cards, debit cards allow you to make purchases similar to a credit card and access ATMs, deducting the specified amount directly from your checking account.

Front

Debt

Back

The money that is owed to someone else. If you have credit card debt, you owe money to the credit card company.

Front

Due Date

Back

The day your payment is due. After this date, you may be charged a late payment fee.

Front

Interest Rate

Back

The percentage of the credit card balance charged when using a credit card, also known as Annual Percentage Rate (APR).

Front

Late Payment Fee

Back

A fee charged by credit card companies if you don’t pay your bill by the due date.