This is a list of credit terms that the financial industry uses that you should be aware of:
Annual Percentage Rate (APR)
For credit cards, the cost of credit expressed as an annual interest rate. Under the Federal Truth in Lending Act, it must be calculated in a standard way. Different APRs may apply to different balances on your account, such as Purchases or Cash Advances.
A person who is authorized by you to transact on your Account
The process of transferring an outstanding balance from one credit card account to another credit card account.
A proceeding that legally releases a person from repaying some or all of debts owed. Chapters 7 and 13 are two basic ways of filing for personal bankruptcy.
Your billing statement is a periodic statement of your Account which tells you the total amount owed to the creditor. The billing statement will also tell you the minimum payment due and the date by which your payment is due.
A cash advance is a transaction initiated by you from which you obtain cash or other forms of negotiable instruments (travelers checks, money orders, etc).
For accounting purposes, when a creditor has classified a debt as uncollectable; however, in many cases, creditor may still collect or attempt to collect the debt.
Credit reporting is the process of reporting your credit card activity (payments, balances, etc) to the three major credit reporting agencies. Credit Reporting enables other lenders to determine if you have done a good job managing credit. By making regular on-time monthly payments, you can demonstrate the kind of financial responsibility that many lenders look for when evaluating your creditworthiness.
The failure of a consumer to make payments or violate other terms as agreed upon in a credit agreement.
A grace period is the time by which you must pay your entire balance in order to avoid Interest charges.
A late payment is failure by the account holder to make at least the minimum payment due so that it reaches the creditor by the due date on the Billing Statement.
The responsibility of the borrower for charges to an account, including purchases, fees, and finance charges. Your liability is described in the cardholder agreement you receive from the issuer.
Line of Credit
A loan with a pre-authorized credit limit established by a creditor.
Represents the minimum amount of money you are obligated to pay each month against your credit card balance. It is determined by the size of the balance and the formula the lender uses to determine the minimum amount due.
This is a payment that you make to a creditor that is not honored by your Financial Institution.