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.


05 Jun 2018


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 out there.

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 a set annual fee that some credit cards have in return for a range of benefits and rewards.

Annual percentage rate (APR)

This shows you how much your borrowing will cost over an average year, over the term of your debt. It also helps you compare different cards on the market. Don’t forget that the length of the 0% interest period on your purchases and balance transfers might be different.

‘Bad 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 a balance from one card to another, it’s called a balance transfer.

Balance transfer credit card

Cards that have an introductory 0% interest rate on balance transfers, which are commonly used by people who want to consolidate or move their debt.

Cash advance/withdrawal

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


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

Credit builder card

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


When your credit card company credits you an amount of money on your card, either when you open your account or as a percentage of what you spend.

Credit card charge

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

Credit card interest

Different providers have different rates of interest, which you will pay on your balance.

Credit history

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

Credit limit

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

Contactless payment

Contactless payment credit cards let you make payments of £45 or less by simply touching the card to the reader.

Credit rating

This rating is worked out using your credit history and help 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 whether to offer you a credit card at all, 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.


When you miss a lot of repayments or go over your credit limit, it’s sometimes called defaulting on your credit card. This will have a negative impact on your credit rating and lower your chances of being approved for financial products, such as mortgages, loans or credit cards.

Due date

Don’t forget this one – it’s the date your credit card bill is due for payment.

Eligibility criteria

There are a number of different factors your provider will consider when deciding if you are able to apply for a credit card or not. 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.

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 interest rate typically offered by providers and only lasts for a set amount of time.

Joint account holder

Some credit card accounts have two people authorised to use them. Joint account holders are equally responsible for the account.

Low APR credit cards

These credit cards offer a low APR on purchases, which can be good if you’re hoping to lower monthly repayments.

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 of your credit card bill that you can pay back each month.

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.

Purchase credit card

A credit card that may offer 0% interest periods on purchases to help customers spread the cost over time.

Representative APR

This is the interest rate, plus any fees that the majority of people who are accepted for a particular credit card will pay.

Temporary authorisations (pre authorisations)

This is a transaction you’ve made but 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 payment made (or cash withdrawn) on your credit card.

Transfer fee

When you transfer your balance 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 completing a money transfer. This is when money is moved from a credit card into a current account.

Variable rate

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

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.

Important information

The content on this page aims to offer an informative introduction to the subject matter but does not constitute expert financial advice specific to your own situation. All facts and figures were correct at time of publication and were compiled using a range of sources.