Glossary

• Annual Fee: A yearly fee that creditors may charge for the privilege of using a credit card.

• Annual Percentage Rate (APR): The cost of consumer credit expressed as a yearly rate. Under the Federal Truth in Lending Act, it must be calculated in a standard way.

• Available Credit: The difference between the outstanding balance and the cardholder’s credit limit.

• Average Daily Balance (including purchases): Calculated by taking the daily beginning balance, adding new charges, subtracting payments and then dividing the total by the number of days in the billing period.

• Balance: The amount of money owed to the credit grantor, including purchases and any applicable fees, interest or transaction charges.

• Billing Cycle: Interval between periodic payment-due dates on a consumer’s account, usually every 25 to 30 days.

• Cash Advance: A cash loan on a credit card. Cash advances are deducted from your total credit line and reduce your total available credit. Note that interest rates for cash advances can be higher than purchase transactions. There may also be a fee associated with cash advances. Refer to your cardholder agreement for details.

• Charge Off: The balance on a credit obligation that a creditor no longer expects to be repaid and writes it off as a bad debt. Even if a debt is charged off, it can still be sold to third party collectors who can still, legally, collect on it.

• Closing Date: The last day that transactions are posted to your account for that billing period.

• Credit: A promise or trust to repay later for goods or services purchased today.

• Credit Counseling: A service that offers counseling about how to work out a realistic budget and debt repayment plan and work with creditors. The goal is to ensure that debts are paid back over a length of time.

• Credit Grantor: Business or person providing goods or services on credit.

• Credit Limit: The maximum balance allowed for a credit card customer.

• Credit Report: A file or record which tracks credit history.

• Creditworthiness: The general qualification for borrowing based largely on a borrower’s credit history.

• Due Date: Date on which a debt or payment must be paid.

• Finance Charge: The cost of consumer credit as a dollar amount. It does not include any charge of a type payable in a comparable cash transaction.

• Grace Period: The time period ranging anywhere from 10 to 25 days in which interest is not charged on current purchases.

• Interest: An amount charged or paid for the use of money.

• Minimum Payment: Represents the minimum amount of money you are obligated to pay each month against your credit balance. It is determined by the size of your balance and the formula the lender chooses to use in determining the minimum amount due.

• Past Due: Payment not made as of the scheduled payment date and may be subject to late charges after an allowable grace period.

• Revolving Account: An account that lends up to a specific amount to a borrower, and requires minimum payments, generally on a monthly basis, while allowing the credit balance to be reused as it is repaid.