Glossary

Credit cards carry their fair share of jargon. Here's a round up of the most common credit card terms:

• Account Number: a unique number assigned by a financial institution to a customer. It can be found on your credit card.
• Additional card: a card we issue to a customer who is nominated by you.
• Annual fee: Most credit cards these days don't charge an annual fee. However some exclusive top end cards still do but these tend only to be offered to those with very high incomes.
• Annual Percentage Rate (APR): this is the annual rate of interest that the normal use of your card will attract over the course of a year.
• Balance transfer: is when you shift a credit card balance to a new card. One credit card pays the balance of the other one, so you owe the new card the balance instead of the old.
• Balance transfer credit card: cards with an introductory rate of interest on balance transfers, normally for a set length of time after the account has been opened.
• Cash advances: when you use you credit card at an ATM or in a bank to take out cash from your credit card account. Cash advances usually attract a high interest rate and can include a handling fee.
• Cashback: when your credit card company pays you back a small percentage of your spending on the card.
• Credit card charge: when a credit card company levies an additional credit card charge on some transactions, like cash advances or using your card abroad.
• Credit card interest: different companies levy different rates on interest depending on the types of transaction.
• Credit history: : your credit history is a record of your credit transactions and includes information on loans, mortgages, credit cards, hire purchases, records of any missed payments, CCJ and defaults.
• Credit rating: an assessment of your credit worthiness that's based on your credit history.
• Credit reference agency: these companies assist credit card companies and lenders in assessing the risk you pose as a borrower. Their information helps lenders make a decision about lending to you and how much interest they'll charge you based on your credit rating.
• Credit report: your credit report can be obtained through your credit reference agency. You'll be able to see the same information as banks and credit card companies do when they access your credit history.
• Foreign exchange commission: this is a commission often added by the credit card company when it calculates the cost of purchases made abroad back into pounds sterling.
• Foreign currency handling charge: this is a charge applied to a purchase that you make abroad.
• Handling fee: this a credit card charge that card companies add to your balance when you carry out certain transactions - using your card abroad, using a credit card cheque or drawing cash from your card, for example.
• Interest-free days: the period of time after you make a new purchase on your credit card before interest is charged on your purchase.
• Introductory interest rate: this is a special rate of credit card interest that applies to one or more named types of transactions for a limited time. The most common transactions to have introductory rates of interest are balance transfers and new purchases.
• Low rate credit cards: credit cards that offer a low APR on standard transactions for a given period of time.
• Loyalty credit cards: reward credit cards which allow you to collect reward points as you spend. A Clubcard Credit Card is one of these.
• New purchase: when you use your credit card to buy goods or services, say, in a shop or a restaurant, you're making a new purchase.
• New purchases credit card: a type of credit card with an introductory interest rate on new purchases for a limited time.
• Notice of Variation (NOV): a document used to communicate changes we are making to the terms and conditions of your credit card. The NOV shows amended text as well as a summary of what was changed.
• Transaction: any payment made (or cash withdrawn) by you or an additional cardholder using the card or card number.
• Typical rate: the APR that we quote is the normal interest rate that most people applying for a card are offered. Your interest rate is influenced by your credit history so you might not definitely get the typical rate.
• Variable rate: on a variable rate card, your Annual Percentage Rate (APR) can change based on market conditions.