Money Guide > Credit Cards > Glossary of Credit Card Terms to Know

  • Annual Fee
    A fee charged by the card issuer for being a card holder. This type of fee is most commonly associated with frequent flyer credit cards or cards designed to help you rebuild your credit.

  • Annual Percentage Rate (APR)
    The yearly percentage rate of the finance charge.

  • Balance Transfer
    The act of transferring the whole or partial balance of one credit card to another credit card. This is usually done if the balance is being transferred to a card with a lower annual percentage rate.

  • Balance Transfer Fee
    A fee that may be charged to cardholders for transferring a balance from one card to another.

  • Billing Cycle
    The days between the last statement and the current statement. Billing cycles generally range from 20 to 32 days.

  • Cash Advance
    Obtaining cash from the card instead of using it to make a purchase. The Grace Period does not apply to cash advances.

  • Cash Advance Fee
    A fee charged for using your card to obtain cash. The fee will be a percentage of the transaction or a flat fee. Higher interest rates generally apply to cash advances.

  • Charge Card
    Different from a credit card as they generally have an annual fee and require the balance to be paid monthly.

  • Classic Card
    The Visa version of a basic credit card. Generally has a lower credit limit. The Mastercard version is a Standard Card.

  • Finance Charge
    The amount of interest charged to an account for the billing cycle.

  • Fixed Rate
    A fixed annual percentage rate of the finance charge.

  • Gold Card
    A credit card issued by issuers that may include added benefits not offered with a Classic or Standard credit card. The credit line is generally between $2,000 and $5,000.

  • Grace Period
    The time allowed to pay your balance without being charged a finance charge. Usually 25 to 30 days.

  • Interest Rate
    The yearly percentage rate of the finance charge. The interest rate will be a fixed or variable rate. See "Fixed Rate" or "Variable Rate" for descriptions. The Interest Rate is also known as the Annual Percentage Rate (APR).

  • Introductory Rate
    A low interest rate offered for a limited time, usually for the first 3 to 6 months on being a cardholder.

  • Late Payment Fee
    A fee charged to a cardholder's account once a payment is overdue.

  • Minimum Monthly Payment
    The minimum amount of the balance a cardholder is required to pay to keep the account in good standing.

  • Over Credit Limit Fee
    A fee charged if your balance exceeds your credit limit.

  • Pre-Approved
    A person who has passed the preliminary screening for the credit card. The person will still need to have their credit checked.