18 Credit Cards Terms Explained

Published by Mohamed Konate | Updated Dec 14, 2023
16. Glosarry terms
Reading Time: 2 Min

Annual Fee

The yearly amount charged for the use of a credit card.

APR-Annual Percentage Rate

APR is an acronym for: Annual Percentage Rate. It is the interest rate that a customer is charged on any outstanding balance.

Balance Transfer

The process of transferring an unpaid balance from one open credit card account to another, usually from different financial institutions. You can save interest if you transfer balances to a credit account with a lower interest rate.

Balance Transfer Fee

A fee charged by a financial institution to transfer a credit card balance from one account to another. This fee can range from 1%-5% of the balance amount.

Billing Cycle

The length of time between billing statements. In other words it is the number of days between your last credit card statement date and your current statement date (Usually 28-31 days).

Billing statement

A monthly record from your credit card issuer which describes and summarizes the activity on your account including the outstanding balance, purchases, payments, cash advances, credits, Interest Charges and other transactions.

Cardholder Agreement

The cardholder agreement is a document from a credit card issuer that outlines the terms and conditions for use of the credit card and the account.

Cash Advance

Using your credit card to withdraw cash from an automated teller machine, bank teller or by writing a convenience cheque. The credit card issuer charges a cash advance fee for the transaction and begins charging interest from the date you take the cash advance.

Credit Limit

A credit limit is the maximum amount that you can charge on your credit card.

Credit Card Issuer

A credit card issuer is a bank or financial institution who offers credit cards.

Grace period

The period of time during which you are allowed to pay your credit card bill without having to pay interest charges. The interest-free period varies between 15 and 28 days.

Interest Rate

The rate that a bank or credit issuer charges for the money you borrow. Essentially it is the cost of borrowing money.

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Late Payment Fee

A fee charged when a payment has not been received by the specified due date.

Minimum Payment

The smallest payment a cardholder can make during each statement period to keep the account in good standing.

Over-Limit Fee

A fee charged after the cardholder balance has exceeded their credit limit.

PIN (Personal Identification Number)

A security code that the customer uses with a credit card to authorize transactions such as purchases and cash advances.

Posted transaction

A transaction that appears on your credit card account statement. “Posted” transactions have been processed by your issuer.

Authorized User

An additional user on the credit card account authorized to make transactions on that account. The authorized user is not liable for transactions made on the account.

Author Bio

Mohamed Konate

Mohamed Konate is a personal finance expert, blogger, and marketing consultant based out of Toronto. He is a former financial services professional who worked for many years at major Canadian financial institutions where he managed the marketing strategy around various financial products ranging from credit cards to lines of credit. Mohamed is passionate about personal finance and holds a Bachelor in Business Administration from the University of Quebec (Montreal) and a Master in International Business from the University of Sherbrooke (Quebec).He is also the author of the Canadian Credit Card Guidebook. Read his full author bio

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