Credit Card Vocab

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What is a Credit Score?

Back

A numerical representation of a person's creditworthiness, based on their credit history and financial behavior.

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What is an Overdraft Fee?

Back

A charge incurred when a withdrawal from a bank account exceeds the available balance.

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What is Debt?

Back

The state of owing money to someone or an institution.

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What is an Introductory Offer?

Back

A promotional offer, often with a 0% interest rate, provided by credit card companies for a limited time to attract new customers.

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What is Interest?

Back

The extra money charged by lenders for borrowing money, usually expressed as a percentage of the principal.

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What is the Annual Percentage Rate (APR)?

Back

The annual rate charged for borrowing or earned through an investment, expressed as a percentage.

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What is a Minimum Payment?

Back

The smallest amount of money that must be paid on a credit card bill to keep the account in good standing.

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What is a Late Fee?

Back

A charge applied when a payment is not made by the due date.

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What is Credit Utilization?

Back

The ratio of your current credit card balances to your credit limits, which impacts your credit score.

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What is a Credit Limit?

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The maximum amount of credit that a financial institution extends to a client.