AN EXPLANATION OF CREDIT CARD JARGON
Whether you are a newcomer to the credit
card marketplace, or are
already a credit card holder, the financial jargon
that surrounds the
subject can be quite daunting. Unfortunately there
is no standardisation
of terminology, but the following topics will be a
handy guide to some
of the most commonly used terms:
STATEMENT DATE:
The date that the credit card company make up, total,
print, and issue a statement of your indebtedness
for that month's outstanding
transactions. N.B. This need not be the date that
you receive the
statement.
INTRODUCTORY RATE:
In order to attract your business, many credit card
providers offer special introductory rates of interest
to new customers. Typically, the
introductory rate offered is 0%, and this will be
offered for a
particular period of time. This period may be for
only a few months, or,
more generously, a year.
Current
Market Introduction Cards Summary
BALANCE TRANSFER:
Introductory offers frequently allow you to transfer
balances from any
other credit cards or store cards, typically at the
commencement of the
new credit card account.
Current
Market Balance Transfer Summary
ANNUAL PERCENTAGE RATE (APR):
This is the percentage rate of interest calculated
on an annual basis.
This is sometimes referred to as the ‘usual
percentage rate’ indicating
that it is the rate that will be applied after an
introductory offer
period has expired.
Current
Market APR's Summary
CASH ADVANCE:
When you use a credit card account to obtain cash.
CASH ADVANCE RATE:
A rate of interest levied for credit card transactions
that involve the
issue of cash - across the counter in a bank, or from
a cash dispensing
machine, etc. Typically, this form of interest is
calculated from the
date that you receive the cash rather than from the
statement date.
CASH BACK:
This is a 'reward' scheme, where you are offered some
financial rebate
for transactions using the credit card. Typically,
cash back schemes
offer anything from 0.1% to 2% of card purchases,
but both the interest
rate and the terms and conditions for cash back schemes
vary
significantly between card companies.
Current
Market Cashback Rate Summary
CREDIT LIMIT:
This will be the maximum sum of money that the credit
card company state
cannot be exceeded as the balance owing on a credit
card at any one
time.
ANNUAL FEE:
Some credit card companies make an annual charge for
a credit card.
Think of this as being like an administration charge.
Not all credit
card companies make this charge.
OVERSEAS TRANSACTIONS:
Most credit card companies levy a charge for the conversion
between
currencies. For example they will add a small percentage
to a
transaction which is typically independent of and
additional to any
interest rate applicable to a transaction, when you
carry out a
transaction in a foreign currency whilst abroad, or
on the internet.
WITHDRAWAL LIMIT:
This is the maximum amount of cash advance that you
will be allowed to
withdraw, through an ATM (Automated Teller Machine
) or over the counter
in a bank, on any one day.
MINIMUM PAYMENT:
This is the amount that you MUST pay each month in
order to regularise
your credit card account. Typically this will be expressed
as a
percentage of the statement balance.
