Credit Card Glossary
Some card issuers may charge you a yearly fee in addition to the interest that accumulates when you make purchases, however this is now very much a thing of the past.
Annual Percentage Rate
The APR is a measurement of the cost of credit and enables people to compare the cost of credit cards from different sources. It includes interest along with other charges consumers have to pay. The APR is a measure of the cost of credit, expressed as a yearly rate.
The annual percent rate of interest on your credit card tells you how much interest you will pay on outstanding balances on your credit card.
The APR is a legal requirement. All credit card issuers must make it clear what the APR is on each of their cards.
Anti Fraud Guarantee
Many credit cards feature an Anti Fraud Guarantee of one kind or another. Basically, these guarantees mean that should someone obtain your card details and use them to fraudulently buy goods or services, you won't be liable for the costs involved.
The credit card approval rate is a measure of the number of applications that are approved.
The approval rate will generally be lower for the cards offering the lowest rates of interest as the credit checks will be more stringent.
Cards with higher approval rates will tend to have higher interest rates as they cards are more sympathetic to people who have an adverse credit history.
The amount of money you owe the card issuer, and includes purchases, fees, interest and transaction charges.
Balance Transfer Rates
If you have an outstanding balance on other credit cards and you want to transfer this to your new credit card, some credit cards offer reduced rates on initial or all transfers.
You can use your card at a bank or cash machine to get a cash loan. The interest rate for a cash advance is typically higher than it is for purchases, and there is usually no grace period. There can also be a handling fee for withdrawing cash in addition to the interest charges, which can raise the cost significantly.
Interest Free Period
Most credit cards offer up to eight weeks interest free credit if your balance is repaid in full by the due date.
An introductory interest rate offered by card issuers to "introduce" you to their services. It will usually expire after a certain amount of time (usually 6 months).
The minimum amount you are required to pay the credit card issuer each month.
The Annual Percentage Rate can fluctuate monthly and quarterly depending on an index which the credit card company is using.