Our credit card jargon buster

From APR to variable rates, the jargon that pops up when you apply for a credit card can be pretty confusing. Learn all the terms worth knowing with our quick-fire guide – you’ll be a credit card pro in no time.

    Published:22 Mar 2022


    Do you know your credit card jargon?

    There’s lots to think about when you apply for a new credit card and if it’s your first card, you might get a bit muddled up by all the terms, jargon and features.

    That’s why our jargon buster is here to make everything a little easier. We’ve also put together a guide to finding the right credit card for you, if you’re not sure where to start.

    Here are our essential credit card terms A-Z:

      Additional card

      The main credit card holder can ask for an extra card so that a second person can use their account.

        Adverse credit

        Someone with a low credit score or bad debt in their past might be seen as having adverse credit.

          Annual fee

          This is an amount of money credit card companies may ask you to pay in return for a range of benefits and rewards.

            Annual percentage rate (APR)

            This is the rate of interest that will be charged over 12 months.

            For example, if you borrow £100 at an APR of 9.9%, the amount you would owe after 12 months would be £109.90.

              ‘Bad credit’ credit cards

              Having a low credit score or bad credit history could make it harder to get a credit card, but Foundation and starter cards could help people build or improve their credit rating.

                Balance transfer

                When you move the amount you owe from one card to another, it’s called a balance transfer.

                  These cards usually have an introductory 0% rate on balance transfers.

                  These cards are often used by people who want to put their debt into one account or pay less interest on their debt.

                    Cash advance/withdrawal

                    When you use your credit card to take out cash at a bank or cash machine.


                      Stands for the Consumer Credit Act 1974 - legislation for protecting customers who are borrowing money.

                        Credit builder card

                        Sometimes known as a Foundation card, this is usually aimed at people with a poor or limited credit history (bad credit) to give them the opportunity to help build or repair their credit rating.

                          Credit card charge

                          An additional charge that's added to some transactions, like cash advances or using your card abroad.

                            Credit card interest

                            Interest is the amount you pay for borrowing money on a credit card. This amount will vary depending on the type of card you choose, your credit history and the amount of debt you have.

                              Credit history

                              Your credit history is a record of how you handle debt, it includes everything from current loans, mortgages and hire purchases, to whether or not you have defaulted on any monthly payments.

                                Credit limit

                                Your credit limit is the maximum amount you can borrow on your credit card. It’s set by your bank and is based on things like your income and credit score. Want to know more? Our guide to credit limits could help.

                                  Contactless payment

                                  Contactless payment credit cards let you make purchases of £100 or less by simply touching the card to the reader.

                                    Credit rating

                                    This rating is worked out using your credit history and helps providers decide whether to give you a credit card or not. For more information, have a peek at our guide to credit ratings.

                                      Credit reference agency

                                      When your provider is trying to decide what rates to give you or if they'll offer you a credit card, they’ll check your credit history with top reference agencies.

                                        Credit report

                                        Your credit report lets providers know how responsible you are at making repayments on purchases, credit or other debts. You can see your own report by getting in touch with one of the top three credit reference agencies - Experian, Equifax or TransUnion.


                                          If you do not make at least your minimum monthly repayment, your credit card account may go into arrears. If your account is in arrears for a number of months, your credit card company may default your account.

                                          This means that you will be asked to pay back your entire balance and it will be reported on your credit report. You may find it difficult to be approved for other financial products for a number of years following this.

                                            Due date

                                            Don’t forget this one – it is the date each month that you need to make at least your minimum repayment by.

                                              Eligibility criteria

                                              There are a number of different things your provider will consider when deciding if they'll give you a credit card. These may include things like your salary, age and credit history.

                                                Foreign exchange commission

                                                When you use your credit card abroad, your provider might charge a commission on exchanging purchases back into sterling.

                                                  Foreign currency handling charge

                                                  This is a handling charge for purchases you make abroad.

                                                  Going on holiday? Our guide to using your credit card abroad might be handy.

                                                    Handling fee

                                                    Card companies sometimes add a handling fee to your balance for certain things, like using your card abroad, using a credit card cheque or drawing cash from your card.

                                                    Going on holiday? Our guide to using your credit card abroad might be handy.


                                                      When you make a purchase on your credit card, your provider will charge you interest if you don’t pay back your balance in full each month. How much they charge will depend on your card, your APR and your agreement with them.

                                                        Interest-free days (or grace period)

                                                        When you spend money on your credit card, there’s normally a little while before you start incurring interest and these are sometimes called interest-free days.

                                                          Introductory interest rate

                                                          When you’re applying for a new credit card, you might be offered an introductory rate of interest. This is normally lower than the standard rate offered by providers and only lasts for a set amount of time.

                                                            Low APR credit cards

                                                            These credit cards offer a low APR on purchases, which can be good if you’re hoping to pay back debt over a longer period of time.

                                                              Loyalty credit cards

                                                              These cards give you the chance to collect rewards like air miles, cashback or points while you spend.

                                                                Minimum monthly repayment

                                                                This is the lowest amount that you can pay back on your credit card debt each month.

                                                                  Money transfer

                                                                  This is when you move money from a credit card into a current account. There’s usually a fee involved when you do a money transfer.

                                                                    Notice of Variation (NOV)

                                                                    If your issuer makes any changes to the terms and conditions of your credit card, you will be sent a NOV that shows you what’s going to be changed.

                                                                      Outstanding balance

                                                                      This is the amount you currently owe on your credit card.

                                                                        A credit card that may offer 0% interest periods on purchases for a set period of time.

                                                                          Representative APR

                                                                          This is the interest rate, plus any fees that most people who are accepted for a credit card will pay over the course of a year.

                                                                            Temporary authorisations (pre authorisations)

                                                                            This is a transaction you’ve made that hasn’t gone through yet, either because it will take a few days or because it’s something like a hotel deposit that will be released at the end of your stay.


                                                                              Any time you make a payment on your credit card it's called a transaction.

                                                                                Transfer fee

                                                                                When you move the amount you owe from one credit card to another, you might have to pay a balance transfer fee, unless you have a 0% balance transfer fee card. There’s also usually a fee involved when you do a money transfer.

                                                                                  Variable rate

                                                                                  On a variable rate card, the annual percentage rate (APR) might change based on what’s happening in the market.

                                                                                    Looking for a credit card?

                                                                                    Check out our range of credit cards

                                                                                    Be a credit card pro

                                                                                    If you feel like you need more information be sure to seek advice before you apply for a credit card, so you know what you are signing up for.

                                                                                    You might want to compare our credit cards to find out more about the different features on offer.

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