Credit Card Glossary

Before you shop for or receive a new credit card, familiarize yourself with the terminology in the Credit Card Glossary below.

Annual Fee:

This is a fee that you will pay annually to use the card. Not all cards have an annual fee, so make sure to read the disclosure information.

Annual Percentage Rate (APR):

The amount you pay for having a balance on the card. Similar to interest paid on the amount you owe. This number is determined by your creditworthiness.

Balance Transfer:

Moving a balance (or debt) from one credit card to another. There may be a fee to use this service. Some credit lenders charge different APRs on balance transfers than regular balances.

Finance Charge:

An amount you pay to use and retain debt on a credit card which includes all service fees, interest, late fees, balance transfer fees and transaction fees.

Grace Period:

The period of time between the transaction date and the billing date, in which a consumer is allowed to pay a credit card bill without being charged interest and/or a late fee. This period is usually 10-28 days.

Introductory Rate:

The initial APR that is charged to your account. When this rate expires, the standard rate will be applied to the outstanding balance and future purchases.

Minimum Payment:

The smallest amount you are required to pay every payment cycle (usually monthly.)

SEE ALSO: Be sure to take a look at the complete Living With Bad Credit Glossary.