Credit Card Vocabulary

Front

What is the yearly percentage rate charged when a balance is held on a credit card?

Back

Annual Percentage Rate (APR) is the yearly percentage rate charged on a credit card balance. A lower APR means lower costs for borrowing.

Front

What is a yearly fee that may be charged for having a credit card, independent of how you use the card?

Back

Annual Fee is a fee charged by credit card companies for the use of the card, regardless of usage.

Front

What is a rating based on how promptly a person pays his/her debts?

Back

Credit Rating is a score that reflects a person's creditworthiness based on their payment history.

Front

What is the time between billing statements, usually 28-31 days?

Back

Billing Cycle is the period between the issuance of billing statements, typically lasting 28 to 31 days.

Front

What is the original amount in a bank account OR borrowed for a loan; also the amount that is still owed on a loan?

Back

Principal refers to the original sum of money borrowed or the amount still owed on a loan.

Front

What is the maximum amount of credit that a financial institution will extend to a client?

Back

Credit Limit is the maximum amount of credit that a lender allows a borrower to access.

Front

What is the amount charged for borrowing money, usually expressed as a percentage?

Back

Interest is the cost of borrowing money, typically expressed as a percentage of the principal.

Front

What is the date by which a payment must be made to avoid late fees?

Back

Payment Due Date is the deadline for making a payment on a credit card to avoid penalties.

Front

What is a feature that allows cardholders to earn a percentage of their purchases back as cash?

Back

Cash Back is a rewards program that gives cardholders a percentage of their spending back as cash.

Front

What is a person authorized to use someone else's credit card account?

Back

Authorized User is someone who has permission to use another person's credit card account.