Answers to Inquiries....

After many inquiries I felt it was time to post this glossary so everyone could understand more about their credit card. If there is something you do not understand, ASK someone who does, it may keep you from getting in debt over your head and no one wants to get those annoying phone calls from debt collectors.
Don't think they have given up when the phone calls stop...they may be in the process of having your bank account frozen.

Annual Fee.....A yearly fee charged by some credit cards for use of the card. Most Discover Cards do not have an annual fee.

APR (Annual Percentage Rate)......A periodic percentage rate that determines the finance charges you pay on your account.

Balance Transfer.....Moving an unpaid balance from one open credit account to another. You will save money if you transfer balances to a credit account with a lower interest rate or for one with 0% for 6 to 12 months.

Billing Cycle.....The length of time between your statements. Discover Card billing cycles are approximately one month in length.

Card Act Agreement.....This the new rule that provides details of your agreement.
Be sure to read it carefully and ask questions about whatever you do not understand.

Cardmember Agreement.....A written document that provides details of your agreement with the credit card issuer. This is another MUST read.

Cash Advance.....Using your credit card to get cash from a bank, ATM, or by writing a convenience check. Typically, the card issuer charges a cash advance fee for the transaction and begins charging interest immediately.

Charge Card.....A specific kind of card that requires full payment of your balance with each billing cycle. Typically charge cards do not charge interest, but late fees can apply if full payment is not received by the due date.

CID (Card Identification Number).....The CID is the three-digit number at the far right on the back of your credit card and is also called a card verification (cvv) number. Merchants may ask for the CID to verify that you have the card in your possession at the time you make a transaction. When using a Secure Online Account Number, please use the three-digit CID generated for that secure account number.


Credit Line.....The maximum amount that you can charge on your credit card.

Credit Report.....A report about your credit history that lenders (credit card companies, mortgage companies, loan agents,etc.) consult to determine if and how much money they should lend to you. Your history for making timely payments, any outstanding debt and open lines of credit are all shown on your credit report. Your credit report is available from credit bureaus such as Equifax, Experian and TransUnion FREE of charge once a year.

Debit Card.....A card issued by a bank that directly accesses available funds from a bank account, typically a savings or checking account.

Default.....When a customer doesn’t make a required payment to a credit card account, or otherwise violates the terms of the agreement between the credit card company and the customer.

Interest Charges.....Certain charges that can be incurred when using a credit card. Interest charges include interest costs.

Interest Rate.....The rate at which a credit card company or other lender charges a customer for “borrowing” money. It is a percentage of the amount borrowed.

Introductory Rate.....A lower APR provided by a credit card company for a limited period of time.

Late Payment Fee.....A fee charged when a payment has not been received by the specified due date. This applies even if it is just 1 hours late. It would be in your best interest to notify them if you have to make a late payment.

Minimum Payment.....The smallest payment a customer can make each statement period to keep the account in good standing.

Penalty Rate.....A higher APR the credit card company charges after the customer has made late payments, exceeded their credit line, or otherwise did not abide by the Cardmember Agreement.

PIN (Personal Identification Number).....A security code that the customer uses with debit and credit cards to authorize transactions such as cash advances. This PIN is different from the user ID and password customers use to access account information online. Never, ever should you write this number anywhere on your card.

Pre-Approved.....A potential customer who has passed an initial credit bureau evaluation.

Prime Rate.....An index rate that determines the interest rate a bank will charge customers. It is one way that a credit card company determines APRs.

Zero Balance.....When your billing statement shows no outstanding balance and no new charges have been incurred.