Useful Information
The finance industry uses a lot of jargon, acronyms and unfamiliar terms. This can make things such as applying for a credit card seem daunting. Card Expert's glossary and useful information explains many of the terms you'll need to know.
American Express
Also known as AMEX, is one of the main international credit card issuing schemes. Unlike Visa and MasterCard, American Express issues its own credit cards and is responsible for its own relationships with retailers.
APR (Annual Percentage Rate)
This is the total cost of borrowing money on your credit card, including the interest charges and product fees, shown as a percentage rate. The calculation is based on the assumption that you maintain the repayments for the full term. The APR is an industry standard calculation and enables direct comparison of loans from all lenders.
Arrears
The term 'in arrears' is used to describe a loan or mortgage amount owed by the borrower if they have failed to keep up the monthly repayments.
Balance Transfer
Introductory offers frequently allow you to transfer balances from any other credit cards or store cards, typically at the commencement of the new credit card account.
Bank of England base rate
The Bank of England sets an interest rate each month known as the 'Base Rate'. This base rate is then used by financial institutions to set the interest rates they charge on debts or pay on deposits.
Cash Back
Cash back returns to you a percentage of the total amount spent on your credit card over a specific period of time, usually monthly or quarterly. This is particularly useful if you normally pay your credit card bills in full each month, as it means you get an effective discount on the products bought with your credit card.
Credit Limit
The maximum amount of credit you can receive on your card. Your credit card issue may increase or decrease this limit, depending on a variety of circumstances.
Credit Score
The system many lenders use to help them decide whether they can lend money to you. They ask a series of questions about you and your finances and score your answers. Your score then results in you being accepted or declined for a loan.
Financial Services Authority (FSA)
The regulatory authority for the UK financial services industry. The FSA has also taken over the regulation of mortgages. All lenders and mortgage intermediaries must be directly authorised and regulated by the FSA (or an appointed representative).
Minimum Payment
This is the amount that you are obliged pay each month in order to regularise your credit card account. Typically this will be expressed as a percentage of the statement balance.
Statement Date
The date that the credit card company make up, total, print, and issue a statement of your indebtedness for that month's outstanding transactions. This need not be the date that you receive the statement.