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.
- Identity Theft
- Identity theft refers to fraud that involves the use of another persons personal information such as their name, Social Security number, credit card number etc. without the individuals knowledge.
- Inactive Account
- An inactive account is a bank account on which no transaction has occurred within a certain amount of time. If too long of a time has passed, in the case of credit card accounts, some card issuers can opt to close the account and take away charging privileges.
- Inactivity Fee
- An inactivity fee is imposed by certain banks on a credit card account that is not used for a certain amount of time. It is a way banks were able to increase their income in 2009 and 2010 but the Credit CARD Act has banned inactivity fees now.
- Interchange Fee
- an interchange fee is a term used to describe a fee paid by a business owners bank to a customers bank when merchants accept credit cards as a form of payment. The amount vary's, but it is usually around 2 percent of the total. The fee for purchases that are made in person are usually cheaper than those that are made online because the card is present and can be inspected.
- Interest Rate
- An interest rate is the price a borrower must pay for taking out a loan. An interest rate may be more complicated in the case of a credit card account due to the fact that lenders will add different types of interest rates. The beginning rate will be low, but new rates can be added with additional purchases.
- Interest Rate Cap
- An interest rate cap is a limit on how high an interest rate can be set for a customer. They can be obligatory in a credit card agreement or by law.
- Introductory Period
- An introductory period is a certain amount of time in which a certain percentage rate stays the same. Wants the amount of time is up, the rate will usually go up.
- Introductory Rate
- The introductory annual percentage rate is a temporary lower annual rate that is offered by credit card companies to interest a customer in applying for that particular card. The rate does not usually stay the same after the first year, but according to the Credit CARD Act of 2009 the Introductory Rate must last at a minimum of six months.
- An issuer is a corporation that issues credit cards. A credit card issuer is not MasterCard or Visa, they are transaction processors.
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