Learning and understanding Credit Card terms

What are CREDIT CARDS terms - Credit cards are a very short term credit but only for wise users. An unwise user can self destruct by misuse of credit cards. Here you got some basic common terms.

Budget Plan Additional funding facility that allows credit card holders to pay off a larger purchase according to a predetermined period. Interest is charged at a higher rate on a budget plan.

Cardholder Individual to whom a credit card is issued.

Card fees An annual charge on credit card accounts.

Cash advance Cash withdrawals from credit card accounts.

Credit balance Surplus funds deposited in a credit card account.

Credit bureaus Companies that document the credit history of consumers. Banks usually contact credit bureaus to determine if a credit card applicant has a record of defaulting on credit payments.

Credit report Account of a consumer's credit history. This could include all applications made for credit as well as the amount of credit available.

Electronic Funds Transfer Unit (EFT) Machines that merchants and other establishments use to process credit card transactions.

Finance charge Interest and bank charges a credit card holder pays on borrowed money.

Fixed Rate An interest rate that does not vary throughout a loan term.

Free Days (Grace period) The length of time that no interest will be charged on an unpaid balance.

Garage Credit Card A card with credit facilities that caters for petrol and other vehicle-related purchases and transactions.

Interest Charge that credit holders pay on outstanding balances.

Minimum Due/Repayment The minimum amount that a credit card holder is obliged to pay on or before the date indicated on the statement.

Payment due date Date on which the the minimum payment on a credit card is due.

Revolving Credit A line of credit that allows advances up to a predetermined amount. The facility is renewable. Funds that have been repaid can be borrowed again.

Unsecured line of credit A credit facility that is not backed up by any security.

Variable Rate Interest rate that changes periodically in relation to the prime rate. Also known as an adjustable rate.