Credit Card Jargon Explained

Credit Card Jargon Buster

A   B   C   D   E   F   G   H   I   J   K   L   M   N   O   P   Q   R   U   V   W   X   Y   Z

A
Annual fee

Some credit card companies charge a fee for having their card. The fee is usually charged regardless of how much you use the card. Check your terms and conditions for details.

APR
The Annual Percentage Rate or APR, is the easiest way you can compare different credit cards. It’s an annual rate of interest that, when divided by 12 months, shows how much you’ll pay on top of your outstanding balance.

If for example, you have an introductory 0% offer, you won’t have to pay any interest on your outstanding balance until the offer ends. To keep any special offer, you need to make at least the minimum repayment on time every month, even over the introductory offer period.

B
Balance transfer
A balance transfer is when you move what you owe from one credit card company to another – usually because the new company is offering an interest-free period or a reduced interest rate. This will save you money as anything you originally paid in interest can go to paying off what you owe more quickly.

A handling fee is usually applied when you transfer a balance.

C
Cash advance and using your card abroad
You can withdraw cash from over 24 million cash machines worldwide but you’ll usually be charged a fee and interest to do so. Dependent on the type of credit card, this can be an expensive way of borrowing money, so most people only do this in emergencies. The exact fee charged for cash withdrawals will be mentioned on your statement or in your terms and conditions.

Dependent on your credit card, cash withdrawals made abroad (outside UK) may not have a cash withdrawal fee – however, you’ll be charged a non-sterling exchange fee instead. Check with your credit card company before travelling to understand what charges may be incurred when spending abroad.

Charges
If you make late repayments, miss them altogether or go over your credit limit, you’ll be charged interest on any outstanding balance and incur default charges. You’ll also have to pay interest from the day you withdraw any cash using your credit card. You’ll find details of the fees and charges listed on your statement.

Credit limit
Your credit limit is the amount of money made available to you by your credit card company. After assessing what they think you can comfortably afford, it’s the maximum amount the credit card company is willing to lend to you. If you exceed this limit you’ll incur charges and it can damage your credit rating.

What’s a credit card?
From a holiday in the sun to your morning latte, a credit card allows you to make purchases that you pay back in the future. It can therefore make it a convenient way of borrowing money in the short term, rather than paying instantly with a debit card or making fixed payments with a loan.

Before you spend on a credit card, always check you can keep up with the repayments. You’ll need to make at least the minimum repayment on time every month to avoid interest or late payment charges.

Find the right credit card for you simply by using the free Barclaycard comparison tool  at barclaycard.co.uk.

If you’re unsure whether you’d be accepted for a credit card, try the Barclaycard Credit card eligibility checker . There’s no harm to your credit rating, so it won’t affect your ability to get credit at a later date.


Credit rating
Your credit rating is based on how well you’ve managed your finances in the past. All credit card companies use information held by credit reference agencies to check how risky you might be to lend money to. The credit rating also takes into account non-financial information such as court orders against you and whether you’re on the Electoral Register

If you have a limited credit history, credit card companies may only offer you a higher interest rate or reduced credit limit, while others may refuse your application.

If you’re unsure whether you’d be accepted for a credit card, try the Barclaycard Credit card eligibility checker . There’s no harm to your credit rating, so it won’t affect your ability to get credit at a later date.

A small step to help your credit rating is to register to vote. It’s really easy, just complete the online form and you’re on the Electoral Register

For free impartial debt advice, try The Money Advice Service

Credit reference agency
Credit reference agencies are companies that collect information about you. For example, information from the Electoral Register  about your address, what credit card and store cards you have and previously applied for, any loans you’ve taken out and your mortgage information. They also monitor how well you’ve managed your payments. The credit reference agencies supply this information to credit card companies, which they use to decide how risky you might be and whether to accept your application.

If you’re unsure whether you’d be accepted for a credit card, try the Barclaycard Credit card eligibility checker . There’s no harm to your credit rating, so it won’t affect your ability to get credit at a later date.


For free impartial debt advice, try The Money Advice Service

Credit report
A credit report is information about you and your credit history that’s gathered and stored by credit reference agencies. This information is used by credit card companies to decide whether to approve your application for credit.

If you have any doubt about your credit rating it’s worth getting a copy of your credit report and checking that the details are correct. Some agencies may charge a small fee for this service, or you could try the Callcredit Noddle  it’s a free online credit report service.

If you’re unsure whether you’d be accepted for a credit card, try the Barclaycard Credit card eligibility checker . There’s no harm to your credit rating, so it won’t affect your ability to get credit at a later date.


D
Direct Debit
A Direct Debit is simply an instruction to your bank authorising a company to collect money directly from your account on a repeat basis – usually every month for a credit card. Setting up a Direct Debit will help you avoid missing a repayment and therefore being charged any late payment fees.

Find the right credit card for you simply by using the free Barclaycard comparison tool  at barclaycard.co.uk.

If you’re unsure whether you’d be accepted for a credit card, try the Barclaycard Credit card eligibility checker . There’s no harm to your credit rating, so it won’t affect your ability to get credit at a later date.


H
Handling or transfer fee
A handling fee is charged when you decide to transfer a balance (debt) to a new credit card. It’s usually charged as a fixed minimum payment starting at £5, or as a percentage of the debt to be transferred. Overall, it can cost you less than continuing to pay interest on your original card.

I
Interest
This is the amount you’ll have to pay on top of the money you’ve spent on your credit card or on any balance that has been transferred to the card. Different types of payments with your card will attract different rates of interest. For instance, using it to withdraw cash usually costs more than using it to make purchases. If you repay your entire balance in full each month, you won’t be charged any interest.

If for example, you have an introductory 0% offer, you won’t have to pay any interest on your balance until the offer ends. To keep any special offer, you need to make at least the minimum repayment on time every month, even over the introductory offer period. See our interest free credit cards

Interest free period
When you buy something with your credit card or transfer a balance, you’ll have an amount of interest-free days before any interest is applied to the outstanding balance. If you pay off the entire balance within the interest free period you won’t need to pay anything extra. For some, this interest-free period is perhaps the most convenient way of borrowing money in the short term.

Credit cards come in a variety of different forms. Some are better at giving you cashback, reward points and 0% on purchases, while others may be ideal for balance transfers or even a combination.

Special or Introductory offers
Introductory offers are promotions used to attract new customers to a credit card, and are usually available for a limited period of time. The offers can be very attractive to customers looking for a better deal – such as 0% interest on a balance transfer or double reward points and cashback options.

The right credit card for you depends on how you want to use the card and how you prefer to repay your balance. To choose the right card for you, consider the best introductory rate and look at the length of time it lasts, plus any fees that are charged.

Find the right credit card for you simply by using the free Barclaycard comparison tool  at barclaycard.co.uk.

If you’re unsure whether you’d be accepted for a credit card, try the Barclaycard Credit card eligibility checker . There’s no harm to your credit rating, so it won’t affect your ability to get credit at a later date.


L
Legal protection
Credit cards offer you greater legal protection than debit and charge cards when you spend £100 or more – even online. This means you’re more likely to get your money back if the website, travel agent or retailer you ordered from goes bust. Put simply, greater legal protection means greater peace of mind.

M
Minimum repayment
Every month that you have an outstanding balance on your account you’ll have to make at least the minimum repayment – it’s usually a percentage of the total you owe. This is the smallest amount of money you need to pay each month, so by paying more you’ll clear your outstanding balance sooner. If you only make the minimum repayment, it’ll take longer and cost you more to clear your balance. Your statement will tell you the minimum you must pay.

If you need free impartial debt advice, try  The Money Advice Service

P
Payment dates
Credit cards differ from other types of credit, such as loans, in that you don’t have to pay a fixed amount each month that’s arranged upfront. You can choose to pay the minimum amount, although it takes longer to pay off the balance and you’re charged more interest in the long run. You can also pay more – up to the full amount of your balance. The choice is yours.

You’ll need to make sure payments reach your credit card account on time. Check your statement to see how long you need to allow different types of payments to reach your account.

S
Special and introductory offers
Credit cards come in a variety of different forms. Some are better at giving you cashback, reward points and 0% on purchases, while others may be ideal for balance transfers or even a combination.

Introductory offers are promotions used to attract new customers to a credit card, and are usually available for a limited period of time. The offers can be very attractive to customers looking for a better deal – such as 0% interest on a balance transfer or double reward points and cashback options.

The right credit card for you depends on how you want to use the card and how you prefer to repay your balance. To choose the right card for you, consider the best introductory rate and look at the length of time it lasts, plus any fees that are charged.

Find the right credit card for you simply by using the free Barclaycard comparison tool  at barclaycard.co.uk.

If you’re unsure whether you’d be accepted for a credit card, try the Barclaycard Credit card eligibility checker . There’s no harm to your credit rating, so it won’t affect your ability to get credit at a later date.


Statement
Your statement is available through Barclaycard online servicing and is designed to let you know what you’ve spent, how much you need to pay and when it’s due. You’ll also see important notices we need to give you about your account, such as information relating to fees and charges – so it’s important that you check your statement carefully every month. To find out where you’ll find things on your statement, take our guided tour

T
Transfer to bank
A transfer to bank is when you move money from your credit card account to your bank account. This is convenient if you want to pay off an overdraft or buy something with cash. It isn’t available on all credit cards and a fee and interest is usually charged, so check with your credit card company before applying.

Find the right credit card for you simply by using the free Barclaycard comparison tool  at barclaycard.co.uk.

Handling or transfer fee
A handling fee is charged when you decide to transfer a balance (debt) to a new credit card. It’s usually charged as a fixed minimum payment starting at £5, or as a percentage of the debt to be transferred. Overall, it can cost you less than continuing to pay interest on your original card.