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Banking / Card Glossary (Credit Card, Debit Card, ATM Card, Others) terms made easy to understand
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Word / Term Explanation Add-on Card A credit card issued to a family member or authorized user that shares the same credit limit and benefits as the primary cardholder’s card. Annual Percentage Rate (APR) The interest rate you pay on your credit card balance. Authorized User Someone who is allowed to use your credit card, but is not responsible for paying the bill Annual Fee A fee that is charged by your credit card issuer each year Available Credit The amount of money that you can currently borrow on your credit card
Balance Transfer The process of moving debt from one credit card to another Balance Transfer Fee A fee that is charged when you move debt from one credit card to another Bankruptcy A legal process that allows you to get out of debt Billing Cycle The period of time between when your credit card bill is generated and when it is due
CVV CVV is a three-digit code on the back of your credit or debit card that helps protect against fraud when making online purchases. Credit Card A credit card is a payment card that allows you to borrow money from a financial institution to make purchases. Cash Advance A loan that you take out against your credit card Cash Advance Fee A fee that is charged when you withdraw cash from your credit card Credit Bureau A company that collects and reports your credit history Credit History A record of your credit activity, including your payments, loans, and accounts Credit Limit The maximum amount of money you can owe on your credit card Credit Report A document that shows your credit history. Credit Score A number that lenders use to assess your creditworthiness
Debit Card A payment card that allows you to access your checking account funds to make purchases Deferred Interest A feature on some credit cards that allows you to defer interest on purchases for a certain period of time
ECS Stands for Electronic Clearing Service. It is a mode by which funds are automatically debited to your account every month to pay recurring bills or fees. ECS is activated by giving standing instructions to the bank.
Foreign Transaction Fee A fee that is charged when you use your credit card to make a purchase in a foreign currency
Grace Period The period of time after your billing cycle ends during which you can pay your bill without incurring interest charges Guarantor A guarantor is a person who guarantees payment by another. The guarantor becomes a co-endorser and assumes liability in event of default.
Hotlisting You can hotlist your credit or debit card if it has been stolen by informing your bank. Hotlisting means that the bank will cancel your card and no one else can use it.
Interest The fee you pay to borrow money IVR Interactive Voice Response (IVR) is a technology that allows a computer to interact with humans through voice and keypad inputs.
Joining Fee A joining fee is a one-time fee that is charged by a credit card issuer when you open a new account.
KYC Know Your Customer (KYC) is a form and a process by which a bank gets to know its customers better – and seeks details such as a customer’s address and financial and occupational status.
Late Payment Fee A fee you pay if you do not pay your credit card bill on time
Minimum Payment The smallest amount you can pay on your credit card bill each month without incurring late payment fees
OTP OTP stands for One-Time Password, a randomly generated code that is used to authenticate a credit card transaction. Overdraft Protection A service that allows you to borrow money from your bank to cover overdrafts on your checking account Overlimit Fee A fee that is charged if you exceed your credit limit
Penalty APR A higher interest rate that is charged if you do not make your payments on time or if you exceed your credit limit PIN A personal identification number that you use to authorize transactions at ATMs and point-of-sale (POS) terminals Prepaid Card A card that is loaded with a certain amount of money that you can then use to make purchases
QR Code QR Code is a two-dimensional barcode that can store a variety of information, such as URLs, contact information, and payment information.
Rewards Card A credit card that offers rewards, such as cash back or travel points, for using the card Rewards Program A program that offers rewards, such as cash back or travel points, for using a credit card
Secured Credit Card A credit card that requires you to deposit a security deposit, which is used to cover your outstanding balance if you default on the card Statement A document that summarizes your credit card activity for a billing cycle
Tariff A tariff in the context of finance (credit card) is a fee charged by a credit card issuer for certain types of transactions.
Utilization Ratio The percentage of your credit limit that you are currently using
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