Debit and Debit Card: A debit card is issued through a bank. These cards look like credit cards and even carry the same brand as the top cards, but rather than charging purchases or cash advances against your credit limit, the money is withdrawn directly from your bank account. This transaction is known as a debit. Debit cards usually require you to entire a 4-digit PIN (personal identification number) to allow the transaction.
Debt Consolidation: When several loans are combined into one loan with one payment, usually lower and of longer duration, that’s known as debt consolidation. With credit cards, this is usually done as a balance transfer.
Debtor: Someone who owes money to another. When you own a credit card, you are the debtor.
Default: When you don’t make a payment on time, you are defaulting. Defaulting on a credit card typically causes the interest rate, or APR, to increase and sometimes the credit limit is lowered. Serious default like several missed payments can cause legal action for the card issuer to attempt to get payment from you.
Discover Card: This is the newest and smallest of the 4 credit card brands (like Visa and Mastercard).
Expired Card: Credit cards have expiration dates printed on them. After that date, the card is expired.
Finance charge: This is a charge on your card separate from interest, usually in the form of over-the-limit fees, late fees, balance transfer fees or cash advance fees.
Fixed Rate: Also called Fixed Rate APR, this is an annual percentage rage that doesn’t change over the course of the year.
Grace Period: Most credit cards offer grace periods on new purchases. If you purchase something, you have that amount of time to pay that amount to the credit card without being charged interest on the purchase. The grace period varies by card. Cash advances typically don’t have a grace period and are charged interested immediately.
Introductory Rate and Introductory Period: Often when you get a new card or you transfer your balances to a new card, you’re given an introductory rate, also known as an introductory APR. This is a lower interest rate offered for a limited amount of time (the introductory period). After that period of time, the rate will revert to the card’s normal APR.
Issuer: A bank, credit company, credit union or financial institution that issues cards.
Joint Account: A credit card account shared by two people.
Late Payment Fee: A type of finance charge added to your credit account when your payment is late.
Mastercard: One of the global credit card brands.
Minimum Payment: This is smallest amount of payment you can make each month. The minimum payment is listed on the billing statement you receive. You can make a larger payment, but a lower payment will make your payment considered late.
Overlimit Fee: A finance charge added when the amount you owe exceeds your credit limit.
PIN: The Personal Identification Number is the number you use to verify a transaction, like a numerical password.
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