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.

Adjusted Balance
The issuer calculates a balance by subtracting payments or credits received during the current billing period from the balance at the end of the previous billing period.
Affinity Card
A co-marketed credit card that typically offers some type of incentive like rewards for cardholder loyalty. Both the issuer and brand associated with the card benifit financially from card use.
Annual Fee
The amount charged or fee for use of a credit card product for a calendar year.
Annual Percentage Rate (APR)
Acronym for: Annual Percentage Rate. This is the interest rate that a customer is charged on any outstanding balance over a given calendar year.
A form used for filling out personal credit information when applying for new credit. An application to a credit card issuer and subsequent approval is based on credit worthiness.
Application Fee
A fee associated with processing a credit card application. These are highly uncommon and should raise red flags with applicants who are requested to pay one.
Approval Response
This is the response period of time for a merchant when approving a transaction.
Acronym for annual percentage rate.
Authorized Amount
Within credit card transactions, this is the approved amount to be charged for a transaction and is deducted from the available open amount of credit.
Authorized User
This is someone who is connected with a credit card account and can charge freely. However, an authorized user is not the main account holder and isn't responsible for payment of charges incurred on the account.
A program with a bank or credit card provider that automatically takes money from an account. This is also referred to as "autodebit", and it is mostly used to pay recurring bills every month.
Available Credit
This is the amount of credit or money available for charge to an individual card account holder.
Average Daily Balance
A formula used by credit card issuers to determine the amount of interest charged over a given period of time (e.g. Month).
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