Glossary of Credit Card Terms
Below is a list of credit card and credit industry terms which can assist with reading credit card statements as well as the fine print on credit related documents.
- Payment Due Date
- A payment due date is the particular date that a minimum payment is required to be paid by for an account every month.
- Payment History
- When an individual is applying for a loan with good rates, he/she wants a good payment history of on-time payments and good credit. A payment history shows an individuals credit rate over time.
- Penalty Rate
- A penalty rate is triggered by a consumer making late payments. It is usually several points higher than the current interest rate and it is charged by the credit card issuer.
- Per Transaction Fees
- A per transaction fee is associated with a merchants account. It means that every time a customer uses a credit/debit card for a transaction there is a fee to the merchant that is associated with that charge.
- Periodic Statement
- A periodic statement, also known as a billing statement or a monthly statement, is a record that is drawn up about once a month to show a consumer all of his/her transactions during that time. It includes payment, fees, charges, and purchases and is available by mail or electronically.
- PIN (personal identification number)
- A personal identification number is associated with a debit card that is like a password for a transaction to be accepted. It is a series of numbers that a card holder chooses when setting up his/her account. It also works to use a signature instead of putting in a pin number when making a transaction.
- PIN cashing
- PIN cashing is fraud that allows an individual to withdraw cash from a victims credit line by using stolen debit/credit card information.
- Point of Sale Terminal
- A point of sale terminal in terms of a credit card is the machine that the card can be swiped through and how the merchant is able to record receiving the payment. The transaction begins when the card is swiped and is completed when the payment is approved.
- POS (Point of Sale)
- The point of sale or the checkout is the place where the transaction occurs. There is an exchange between a merchant and a customer: goods or services are exchanged for payment.
- Post Date
- The Post Date is the day when a credit card company will become aware and place on their books a purchase made by a credit card owner.
- Preapproval is something done by credit card issuers. They can see an individuals credit score and decide that he or she is eligible for a credit card by that particular company. An individual can not be solicited to until he or she is over the age of 21. It is also known as prescreening.
- An individual who has been preapproved means that he or she has been screened for their credit score and deemed eligible for a credit card by a particular credit card company because his or her score is high enough. If an individual agrees the credit card issuers will decide on a annual rate percentage based on the individuals current credit score.
- Prepaid Cards
- A prepaid card is a card that works when purchasing items. There is a certain amount of money deposited onto the card at an earlier time and can be used until it reaches the amount deposited. They work like store-value cards.
- Prime Borrower
- A prime borrower is an individual with excellent credit scores and are acknowledged for paying off their debts on time. They are usually offered significantly lower interest rates due to their previous history.
- Prime Credit
- A prime credit means that an individual has a notable credit record and is acknowledged for paying debts on time. Individuals with prime credit are offered exceptional terms when being given credit. There is no defining score that separates individuals from having non-prime credit and usually varies from company to company.
- Prime Rate
- Also referred to as prime lending rate, this is the referenced interest rate used by banks as the annual percentage rate to quote loans against.
- Prime Rate (or prime interest rate)
- A prime rate is a rate that is 3% higher than the rate set by a bank. Most banks tend to have similar rates. Wall Street Journal is known for comparing the prime rates of different banks.
- Purchase Rate
- A purchase rate is a particular interest rate that an individual would be charged for purchasing something with his or her credit card. The rate is usually significantly lower than the rate that would be made for borrowing money because a credit card issuer or a bank would consider a daily purchase as something that is not as risky as lending money in advance.
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