Credit Terms

APR (Annual percentage rate) – This is the amount of interest you will pay on your credit card annually. It is designed to give you an idea of the cost of borrowing on your credit card.

ATM - Automated Teller Machines, or cash points, allow you to access cash with a credit card or debit card associated with your bank account. They require you to enter your personal identification number (PIN) into the machine to get cash.

Account Number - A unique number assigned by your bank or credit issuer. On your credit card, this number is embossed and encoded on the plastic card.

Additional cardholder - When you have a credit card you can add an additional card to the account for use by someone else. For example, your parents could add a credit card to their own account for you to use, but this will not help you build credit. The main cardholder has responsibility for ensuring payments on the additional card are made. All purchases are shown on the monthly credit card statement.

American Express - Also known as AMEX, is one of the main international credit card issuing schemes. It issues its own credit cards - unlike Visa and MasterCard and is responsible for its own relationships with retailers.

Annual Fee - Some issuers charge for the management of your credit card account. They sometimes provide access to a number of additional benefits as part of the charge, but this is something you probably want to avoid as a college student.

Bad Credit - A term used to describe a poor credit rating – something you want to avoid! Some of the ways you can damage your credit rating are making late payments, skipping payments, exceeding your credit card limits or declaring bankruptcy. “Bad Credit” can result in being denied credit in the future so be sure and build your credit through smart spending habits and paying your bills on time.

Balance Transfer - The process of moving an unpaid credit card debt from one issuer to another. If you have multiple credit cards or are able to get a new credit card with a lower APR you may consider transferring debt to pay the lower interest rate.

Cardholder – You! The person to whom a card is issued, or who is authorized to use an issued card is the cardholder.

Cash Back - Cash back returns a percentage of the total amount spent on your credit card over a specific period of time, usually monthly or every three months. This is particularly useful if you always pay your credit card bills in full each month because it means you are basically getting a discount on all your purchases!

Co-Branded Card - A co-branded credit card is sponsored by both the issuing bank and a retail organization such as a department store or an airline. These types of cards may give you various benefits such as discounts or free merchandise from the sponsoring organization based on how much you use your credit card and other terms.

Credit Card Number – Unique number assigned to your credit card.

Credit Card Processor - A company that performs authorization and settlement of credit card payments, usually handling several types of credit and payment cards (such as Visa, MasterCard, and American Express).

Credit History - A partial profile of your financial life given within a particular time frame. It shows how well you pay your bills on time and how much you may owe to particular parities. Credit card issuers use this information to decide whether to provide you with a new credit card.

Credit Limit – Your credit limit is the maximum amount of credit you may receive on your card. Under some circumstances, your card issuer may increase or decrease your credit line.

Debit - A charge to your bankcard account. A transaction, such as a check, automated teller machine (ATM) withdrawal, or point-of-sale (POS) debit purchase that debits a demand deposit account.

Expired Card – Your card is expired when the embossed, encoded, or printed expiration date has passed.

Introductory Rate - Many credit cards offer a low introductory rate that switches to a higher variable or fixed rate after a certain time period. It could be described as a special offer, or discount. Make sure that you know how long the introductory rate is applicable and what APR the card will carry after the introductory period elapses. For example, several of the cards on College Plastic offer a 0% introductory rate for 6 months.

Mastercard – MasterCard is one of the largest credit card providers.

Mastercard Card – A credit card or debit card that bears the MasterCard symbol. MasterCard provides several credit cards specifically tailored to college students such as the prepaid Wired Plastic cards, The Vaya MasterCard, and Universal Entertainment cards. Applications for these cards are available on College Plastic.

Overlimit - This refers to when your account has surpassed its credit limit with a transaction.

PIN (Personal Identification Number) – This is a sequence of digits, usually four, that are used to verify your identity, when at the ATM or making other credit card or debit card transactions.

Plastic (Card) - This is a generic term used to identify any of the various credit or debit cards. Go plastic!

Primary Account Number (PAN) - The number that is embossed, encoded, or both, on a plastic card that identifies the issuer and has your account name.

Processing Date - The date on which a credit card or debit card transaction is processed by the bank.

SSL – Make sure a web site you make a credit card purchase on uses SSL or Secure Sockets Layer. This is an encryption standard devised by Netscape Communications that ensures your transactions are safe and secure.

Statement – This includes all your purchases / transactions for a monthly period on your credit card or debit card. These transactions include deposits, withdrawals, checks, electronic transfers, fees and other charges, and interest credited or earned. The statement is usually mailed to you, but some banks let you see your information online.

Variable Interest Rate - With variable-rate cards, the APR changes when interest rates or other economic indicators change. This is also known as a floating rate. As a college student you may want to get a fixed interest rate card so that you do not worry about the interest rate changing unexpectedly.

Visa - Visa International Service Association is another major credit card provider.

Visa Card - A credit or debit card that has the Visa symbol.