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Glossary

This glossary lists some of the terms related to credit cards. It is good to know about these when you are using your credit card. You can learn more about credit cards on our credit cards FAQ page and our credit card product guide page.


Air miles are credit card reward points that a cardholder can earn every time they spend on their card. The miles can be exchanged for airline tickets from the credit card company's partner airlines.

The yearly fee charged by the credit card company for the service they provide to the card holder. An annual fee is sometimes referred to as a membership fee.

The APR represents the actual cost of interest on the funds borrowed over the term and is expressed as a percentage. Some times the APR is referred to as the mark up rate in Pakistan.

 

This is a service that automatically deducts funds from a savings or current account to pay for your credit card facility. You can only set this up if the card you are using and your bank account are from the same institution.

Available credit refers to the amount of unused credit on the credit card. Subtract your outstanding balance from your credit limit and you get your available credit amount.

Bad credit refers to a bad credit history. This can be caused by making late payments, going over your credit limit, or defaulting on your loan.

In the context of credit cards, balance transfer refers to the transferring of outstanding loans from one or more credit cards to another credit card account. This debt consolidation is often done to take advantage of the new card's lower interest rate.

The fee charged when a cardholder opts to transfer his or her outstanding debt from one or more credit cards to a new credit card.

This refers to the institution that provided the card. The card issuer can be a financial institution or a bank.

This service allows you to withdraw money from an ATM using your credit card. You should be mindful that using this service comes with additional charges.

The fee charged for taking using the ash advance facility on your credit card. Some credit card issuers charge a set fee per transaction or a certain percentage of the amount withdrawn.

This is another type of reward that cardholders get to enjoy. For promotional purchases, credit card holders can get a certain percentage of their purchase back on to the card.

This is a record of your credit standing with financial institutions. Your credit history includes information on all loans and credit facilities ever approved against your name, late payments that you make, and any default that you have done.

A credit limit is the maximum amount that can be charged on a credit card. The credit limit is set by the credit card issuer after taking into account the cardholder's credit history, employment status and income.

This is a security feature on the credit card. The CVC is a usually a three or four digit number on the back of the credit card.

The CVC is one of the most important piece of information required for transactions being conducted via the internet or telephone.

 

Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many others.

Debt consolidation is the process of taking all your debts (credit card balances, overdrafts and personal loan) and consolidating it into one, lower-interest, loan that gives you one easy, manageable payment to meet monthly.

This is another term used for the annual percentage rate.

These are unauthorized transaction on your credit card. Most credit card issuers have systems put in place to protect their cardholders against these type of transactions. However, you may also catch some of these fraudulent transactions when you check your statement of account.

These are unauthorized transaction on your credit card. Most credit card issuers have systems put in place to protect their cardholders against these type of transactions. However, you may also catch some of these fraudulent transactions when you check your statement of account.

This is the fee paid for having borrowed from the credit card and is usually charged when a balance is carried over from one month to the next. This is usually expressed as an annual percentage rate.

This is a fee that is charged when the cardholder fails to settle the bill by the due date.

MasterCard is major payments company. MasterCard is not the issuer of the card, the bank is the issuer.  A MasterCard card merely validates that the transactions conducted through this card will be processed through the MasterCard network.

This is the lowest amount that a cardholder must pay every month to stay in good credit standing with the issuer of the credit card. This is usually calculated as a percentage of the total amount due.

This is the lowest amount that a cardholder must pay every month to stay in good credit standing with the issuer of the credit card. This is usually calculated as a percentage of the total amount due.

This is the fee charged when the credit limit is exceeded.

This is an important date to take note of. This is when the cardholder should make at least the minimum monthly payment on the card. Missing this date will cause a late payment fee.

The PIN is the security number for your credit card. This is the number that you use when you withdraw cash on your credit card. In some instances you may be required to provide this number when swiping the card for purchases.

The principal cardholder is the main cardholder who is the main borrower.

A supplementary cardholder is the person that gets to use an additional credit card that shares the credit limit of the principal card holder. The principal cardholder is responsible for the supplementary cards associated with the main card.

This is the record holding a log of transactions conducted on the credit card. A statement of account is sent to the card holder every month.

Visa is a major payments company. Visa does not the issue the card, the bank is the issuer.  A Visa Credit card merely validates that the transactions conducted through this card will be processed through the Visa network.

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