Credit Card Vocab

The cost of credit

• Principal

• Introductory Rate

• Finance Charge

• Interest

The smallest amount a borrower is required to pay each month. Each company has its own policy about this payment. 3-5% of the balance owed is a common minimum.

• Minimum Payment

• Late Payment Fees

• Credit Card

• Annual Fee

Tags

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The way the card company figures the amount charged to the account each month. This figure is used to determine the minimum payment and how much interest will be charged each month.

• Annual Fee

• Introductory Rate

• Minimum Payment

• Method of Calculating Balance

The dollar amount the card company charges once a year for the right to use a credit card. Many companies , but not all, charge this fee.

• Finance Charge

• Minimum Payment

• Annual Fee

• Checks and Check Book

Looks like a credit card but acts like a check. It enables the owner to draw funds form a checking account in real time.

• Debit Card

• Checks and Check Book

• Minimum Payment

• Credit Card

A rating based on how promptly a person pays his/her debts.

• Credit Score

• Principal

• Credit Rating

• Credit

An agreement to provide, goods, services, or money in exchange for future payments with interest by a specific date or according to a specific schedule. It's basically using someone else's money for a fee.

• Credit

• Credit Card

• Minimum Payment

• Introductory Rate

The amount of money someone is willing to loan you. Also the amount that is still owed on a loan.

• Principal

• Amortization Table

• Finance Charge

• Introductory Rate

Extra charges that the bank issues someone for obtaining credit. They can include charges for carrying a balance, transferring a balance, requesting a cash advance or making a foreign transaction.

• Annual Fee

• Finance Charge

• Interest

• Credit Card

A rating used by credit reporting companies to help lenders decide whether and/or how much credit can be extended to a borrower.

• Credit Card

• Credit Rating

• Credit Score

• Late Payment Fees