|
| Credit Card Terminology |
 Floor – This is the minimum possible rate on a line of credit or variable-rate loan, after the introductory rate period.
Grace Period – is the interest free time that a lender allows between the transaction date and billing date. You have a grace period when your card does not carry a balance. The usual grace period is between 20 and 30 days. If no grace period is present, finance charges will accumulate the moment a purchase is made using the credit card. You have no grace period if you carry a balance on your credit card.
Minimum Payment – The minimum amount that a cardholder must pay in order to keep the account from going into default. If card issuers are unsure of the cardholder's ability to pay, they will set a very high minimum. Much of credit card companies require a minimum payment of 2 percent of the outstanding balance.
Over-the-limit Fee – The fee charged for going over your credit card limit.
Periodic Rate – The interest rate which depends on a specific amount of time. A monthly periodic rate is the cost of credit per month; a daily periodic rate is the cost of credit per day.
Pre-approved – This term only means that a potential customer has passed the prior credit information screening. In order to get new customers credit card companies often send out "pre-approved" junk mail. If the credit card companies don't like customers credit rating, they can then reject their.
Secured Card – A special credit card that the cardholder secures with a deposit to ensure payment of outstanding balance in case of non-payment. This is mostly applyed by people new to credit, or people who are trying to rebuild their credit.
Teaser Rate – This is also known as introductory rate, it is usually bellow the market-suggested interest rate. It is proposed in order to attract customers and make them switch credit cards or lenders.
Variable Interest Rate – The percentage that a borrower pays for the use of money. The variable interest rate based on the changes in other interest rates therefore is moves up and down periodically.
|
|
