Credit Card Glossary
The Annual Percentage Rate has to be clearly shown by all credit card companies, this is a legal requirement. In general, the lower the APR the better the deal.
Balance transfer rates are applied to existing card debt that is being moved from one credit card to another or a consolidation of other debts. These rates are lower than standard rates and only apply to the debt transferred for a specified term or until it is repaid in full. Many credit card companies offer a 0 balance transfer rate.
Many credit card providers offer a cashback scheme similar to a reward scheme. The cashback is paid based on the amount you spend on your card.
Credit Card
Credit cards are used to pay for goods and/or services and are a form of borrowing. You can also obtain cash advances and transfer existing debt.
Direct Debit
This allows an organisation to take money directly from a bank account.
Minimum payment
The minimum amount repayable each month.
Interest free period
This refers to the time between when you buy something using your card and the date when you must pay your monthly bill. If you pay your bill in full every month you won’t pay any interest.
Promotional Rate
The promotional rate is the rate applied to your account until a given date. Thereafter it will revert to the rate applicable to your account at that time.
Rewards are usually points based and applied to your account each time you spend on the card. Each credit card provider will offer different schemes which will enable you to cash in your points.