Credit Card Jargon Explained

A

Annual fee
Some credit card companies charge a yearly 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/Annual Percentage Rate
The Annual Percentage Rate or APR helps you compare different credit cards. Put simply, it's the total cost of borrowing over a year, including interest and standard fees. This takes into account any interest and standard fees that you have to pay.

For example, let’s say your credit card has an interest rate of 20%. If you borrow £1,000 in January and don’t repay it until the end of the year, the cost of borrowing would be 20% of £1,000, or £200. In reality, the actual cost could be higher because of compound interest (interest charged on interest) and other charges and fees.

Typically the lower the APR the less interest you'll be charged on a monthly basis.

Assumed credit limit
The assumed credit limit of £1,200 is an example figure that lenders use so you can easily compare products. All financial services companies have to show it on the Representative example in their promotional material before you take out a card. Once you've made an application the credit limit you actually get will depend on your circumstances. 

B

Balance transfer
A balance transfer lets you use the credit available from one credit card to pay off the balances due on one or more other credit or store cards. Usually the balance transfer interest rate is lower than the rate of the balance on the cards that are being paid off.

You won't be able to transfer a balance from another Barclaycard or from a store or credit card that's from within the Barclays Group.

Balance Transfer fee
This is a fee that may been charged when you take out a Balance Transfer. The fee depends on the offer, which we’ll always confirm before you apply. If a fee applies to a balance you transfer to your Barclaycard, it will be charged on the amount you’re transferring.

The fee is calculated as a percentage of the amount you’re transferring, and it will be added to your balance. You’ll pay interest on the balance transfer fee at the same rate as the rest of your balance transfer amount.

C

Cash balance
Together with standard and promotional balances, your cash balance is part of your main balance and can be found on your monthly statement.

When you take out cash or make a cash-like transaction in the UK or abroad, you will not be charged any interest if you pay your main balance in full by your payment due date. You’ll receive up to 56 days interest free on cash and cash-like transactions. You can find more information about your cash interest rate on your monthly Barclaycard statement.

Your cash balance includes:

Sterling cash withdrawals

Gambling

Lottery websites

Money orders

Wire transfers

Buying foreign currency from a UK bank or Bureau de Change – including traveller’s cheques and pre-paid foreign currency travel cards

From 26 January 2021 any transaction attempted to be made with a gambling establishment or a gambling website will be blocked.

Before you take out cash or use your card for cash-like transactions, we want to make sure you understand what the interest – and fees – will cost you. Find out more about your cash interest and fees. 

Cash withdrawals abroad
Using your credit card abroad doesn’t have to be complicated. With Barclaycard, you just pay one single non-sterling transaction fee of 2.99% on each transaction when you buy something or withdraw cash overseas. This fee may not apply if you are offered a lower promotional rate.

Cash withdrawals in the UK
When you take out cash or make a cash-like transaction in the UK, you will not be charged any interest if you pay your main balance in full by your payment due date.

You’ll receive up to 56 days interest free on cash and cash-like transactions. You can find more information about your cash interest rate on your monthly Barclaycard statement.

Please refer to your terms and conditions for more information about cash transaction fees.

Cash-like transactions on your card include:

Gambling

Lottery websites

Money orders

Wire transfers

Buying foreign currency from a UK bank or Bureau de Change – including traveller’s cheques and pre-paid foreign currency travel cards

You can find out more in our understanding interest section.

Charges & Default fees
If you make late repayments, miss them altogether or pay less than your minimum amount, you’ll be charged interest on any outstanding balance and incur a default fee.

The default fee is £12, and we won’t charge this fee more than four times in a year.

For example, if your payment is returned to us after a Direct Debit doesn't go through and then this means you miss your minimum payment that month; you'll be charged a late payment fee.

We don’t charge you any interest on default fees for 28 days starting from the time we let you know that it is being charged. But after 28 days, we charge interest on your default fee at your standard rate.

Find details of default fees and charges and what you can do to help avoid them. 

Compound Interest
Compound interest rates takes into account the interest you pay on interest as well as the outstanding amount if you don’t pay your balance off every month. Even if you do pay your balance off every month, the compound rate shows how much interest you’d pay each year if you didn’t.

Compound rates will also go up or down when the Bank of England Base Rate changes but the changes will be bigger than the changes to the simple interest rates because they take in to account the interest on interest.

Credit limit
A credit limit is the amount that your card provider is willing to make available to you – in other words, it’s the maximum amount of money that you’re able to borrow.

Your 'available credit' is your credit limit minus any outstanding balance on your card. Your maximum credit limit will be decided based on a number of things, such as how long you've been a customer and how you’ve used credit cards in the past. Learn more about credit limits. You’ll see your limit on your monthly statements, in Barclaycard online servicing and on the Barclaycard app. You need to be 16 or over to use the app and T&Cs apply.

Credit rating/credit score
Your credit rating (also known as a credit score) shows how well you've managed your finance in the past, based on your credit report over the last six years. It's calculated by Credit Reference Agencies (CRAs), and is used by all credit card companies to check how risky you might be to lend money how well you've managed your credit in the past. The credit rating also takes into account non-financial information such as court orders against you and whether you’re on the Electoral Register. Find out more about understanding your credit history.

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 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 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 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 MoneyHelper

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 a free online credit report service.

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.

If you’re unsure whether you’d be accepted for a credit card, try the Barclaycard 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 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 from a credit reference agency and checking that the details are correct. Some agencies may charge a small fee for this service, or you could try a free online credit report service.

If you’re unsure whether you’d be accepted for a credit card, try the Barclaycard 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

Default fees & Charges

If you make late repayments, miss them altogether or pay less than your minimum amount, you’ll be charged interest on any outstanding balance and incur a default fee.

The default fee is £12, and we won’t charge this fee more than four times in a year.

For example, if your payment is returned to us after a Direct Debit doesn't go through and then this means you miss your minimum payment that month; you'll be charged a late payment fee.

We don’t charge you any interest on default fees for 28 days starting from the time we let you know that it is being charged. But after 28 days, we charge interest on your default fee at your standard rate.

Find details of default fees and charges and what you can do to help avoid them.

Direct Debit
A Direct Debit can only be set up by the organisation to which you're making the payment. Normally, you sign a mandate that gives the company permission to take funds from your account in an agreed way – like a monthly gym membership or your mobile phone bill. It normally confirms who's receiving the payment, the account to be debited, the amount and the dates of the payment. You‘re protected under the Direct Debit Guarantee scheme so that any amount debited in error is refunded immediately.

Direct Debits can also be cancelled by the bank without the need to contact the merchant with which the direct debit is set up. If this happens, you will need to contact your bank to find out what the issue is.

Find out more about the different ways to pay.

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.

You can find out more in our understanding interest section.

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.

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

Late payment fee
A late payment fee of £12 is charged when you miss your minimum payment by not making a payment, by only paying part of your minimum payment or by making your payment late after the payment due date.

Find out more about late fees and some simple ways to avoid them. If you're finding it difficult to stay on top of your finances we're not here to make it worse, so please get in contact. You can also visit our money worries section or If you need free impartial debt advice, try MoneyHelper.

Introductory or Special 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.

Legal protection
When something goes wrong with a purchase you paid for with a credit card, you’re protected by law for certain types of transactions and you could get your money back.

To help you understand your refund rights, we’ve created this helpful guide.

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're finding it difficult to stay on top of your finances we're not here to make it worse, so please get in contact. You can also visit our money worries section or If you need free impartial debt advice, try MoneyHelper

Money Transfer

A money transfer is when you move money from your credit card account to your bank account. This is convenient if you want to pay off expensive debts or buy something with cash. The cash is usually transferred the next working day. With Barclaycard, the amount you can transfer can vary, depending on your individual credit limit and the existing balance on your Barclaycard.

You’ll find the amount you can transfer in ‘Transfers and offers’ in Barclaycard online servicing, and in the Barclays or Barclaycard app.

Money transfers aren't available on all credit cards and a fee and interest is usually charged, so check with your credit card company before applying.

Find out more about Money Transfers

Money Transfer fee

This is a fee that may been charged when you take out a Money Transfer. The fee depends on the offer, which we’ll always confirm before you apply.

The fee is calculated as a percentage of the amount you're transferring - usually between 1.9% and 2.9% We'll let you know what your fee will be when you apply to make a transfer.

P

p.a.
p.a. stands for per annum which just means yearly or annually.

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.

If it makes it easier, you could change a payment date to suit you (for example to match payday). Find out how to change your payment date.

Promotional period
Promotional rates last for a certain amount of time. They either end on a fixed date (e.g. 31 December 2021) or after a set period of time (e.g. 18 months). After this date, if you haven´t paid off the balance, you'll be charged your purchase rate on the amount you still owe. The promotional period and the purchase rate will be detailed on the promotional offer before you take it out.

Find out more about promotional rates and how they work.

Promotional rates
Promotional rates 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 promotional rate and look at the length of time it lasts, plus any fees that are charged. Find the right Barclaycard for you.

If you don’t manage your account properly, you’ll lose your promotional rate and it could have an effect on your credit rating. Find out more about promotional rates and what you'll need to do to keep them.

Purchase rate
Purchase rate is the interest rate we charge when you use your credit card to buy something. You won’t be charged interest on purchases if you pay off your full balance each month. Our purchase rate is a compound rate which you can find out more about in our understanding interest section.

R

Representative APR
Representative APR is the rate given to at least 51% of the people who are granted the card by the credit card company, while personal APR is the rate you’re offered based on your personal circumstances. When a list of different credit cards is sorted from high to low by their APRs, you’re seeing what cards have the highest and lowest rates for the majority of people who get them. The cards aren’t necessarily ordered by those that will personally give you the highest or lowest APR.

Representative example
The representative examples you see in our offers give you an idea of how much it could cost if you borrowed £1,200 in a year.

Lenders show representative examples on their financial promotions, or adverts, to follow industry laws and regulations. This helps you compare different products and provides a guide on how much taking out credit could cost.

Here’s what a typical Representative example looks like:

Representative example

Representative APR - 28.9% APR (variable)

Purchase rate 28.9% p.a. (variable)

Based on a £1,200 credit limit

Annual Fee - No annual fee

The approval of your application depends on your financial circumstances and borrowing history, so do the terms you may be offered. The balance transfer period and interest rates, may differ from those shown.

S

Simple interest
Your simple interest rate is what we use to work out how much interest you’ll be charged each month. It moves in line with the Bank of England Base Rate – so when the Base Rate changes, you’ll see your simple rate change by exactly the same amount. The simple rate will be displayed under 'Your current interest rates' on the front page of your statement which you can see by logging into online servicing and on the Barclaycard app. You need to be 16 or over to use the app and T&Cs apply.

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.

Standard balance
Together with your cash and promotional balances, your standard balance is part of your main balance.

Transactions in your standard balance include:

Purchases – when you use your card to buy goods or services

Balance transfers and money transfers if the promotional offer has ended – if you haven’t repaid your balance in full when your promotional offer ends, it’ll be included in your standard balance

Interest and account usage fees on the above

If you don’t pay your balance in full by your payment due date then interest is charged on your standard balance, from the date the purchase is debited to your account.

Standard rate
The standard rate is the APR that you'll have been offered when you opened the account. Once any promotional period is over, we'll transfer any outstanding balance to your standard balance or your cash balance (as appropriate) and will start charging the standard rate.

The standard rate will be displayed under 'Your current interest rates' on the front page of your statement which you can see by logging into online servicing and on the Barclaycard app.

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.

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.

Transfer or handling 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.

V

Variable APR 
Most credit cards’ APRs are variable. This means the interest rate could change depending on the Bank of England Base Rate, or how you use the card, e.g. if you don’t make monthly payments on time, your APR could go up. To see how a change in the Base Rate or to your balance could affect your monthly repayments, check out the Barclaycard Interest Calculator.

W

What’s a credit card?
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 cash, a debit card or making fixed payments with a loan.

Before you spend on a credit card, it's important to be aware of the potential costs and only borrow what you can afford to pay back. If you pay off your balance in full every month, you’ll have up to 56 days without paying any interest on your purchases. If you choose to pay it off later, you'll be charged interest on what you owe. If you miss a payment, pay less than the minimum repayment or go over your credit limit you could incur additional costs through interest and charges.

Find the right credit card for you simply by using the free Barclaycard card finder tool.

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