| AER |
Annual equivalent rate, the rate rate
over a year if amounts are compounded. Typically used for savings
accounts where interest is paid monthly. The AER assumes all interest
paid is left in the account and so the next months interest is paid on
the pervious months interest compounding the amount. |
| APR |
Annual percentage rate, a standardised
rate to compare more accurately between different cards. APR includes
all fee's and costs. APR means the annual percentage rate of charge for
credit determined in accordance with the Total Charge for Credit
Regulations. |
| Affinity Card
|
A credit card offered by two
organisations. One would be a financial institution who would normally
issue their own cards, the other organisation would be non-financial. Most
often this would be a charitable organisation and the card would offer a
donation to the charitable organisation based on the consumers use of
the card. It may simply be a non-financial but profit making company
such as Hilton and their HHonors card offering benefits with the Hilton
group based on the card use. |
| Annual Fee |
A fixed amount (normally) charged once a
year for the use of the credit card. |
| Balance Transfer |
A lump sum amount transferred from a
credit card, bank account or similar to another credit card. This would
normally be done to take advantage of low rates being offered
specifically for balance transfer by a particular credit card brand, or
to simply consolidate outstanding debts. |
| Cash Advance
|
Cash withdrawn from cash machine (ATM) |
| Cash Back |
An amount of money paid by the credit
card company into your account based on your purchases and possibly
other transactions. In affect giving some of the money you have spent
back to you. |
| Charge Card |
Card requiring the outstanding balance to
paid by the agreed date and no amounts can be carried over to the next
month. |
| Charity Cards
|
True affinity cards. |
| Chip and PIN |
New technology replacing the use of
signatures at counters with a keypad and a perosnal identification
number entered by the card holder. |
| CIFAS |
The fraud avoidance system. Developed in
consultation with the office of fair trading and the office of the
information commissioner. It aims to detect and prevent fraud. A CIFAS
warning on your credit record indicates your name and or address has
been used in conjunction with a fraudulent application. It means anyone
reviewing your credit history would be warned to validate your details
and application. it is not an indication that you have personally been
involved with fraudulent application. |
| Consolidation |
Transferring debts or balances from two
or more areas and placing them under one card or loan. Advantages being
easier management, possibly lower interest rates and the ability to
restructure the period of repayment possibly lowering monthly outgoings. |
| Credit |
Credit is an agreement between a lending
organisation such as a bank, or credit card company and you, the
consumer seeking to borrow. The result of the agreement is that you
receive cash for your own use with terms set for repayment. |
| Credit Limit |
The maximum amount of outstanding balance
you are allowed to reach on your credit card. |
| Credit Reference
Agency |
A company that gathers information on
your credit history and supplies it to financial institutions. |
| Credit Score
|
A rating given based on your credit
history. Information on your past financial history and related personal
facts are held by agencies and provided to institutions in order for
them to evaluate your potential risk when providing you with credit. |
| Debit Card |
Used in conjunction with a bank account.
You present it when paying in the same way as a credit card, the
difference being the credit limit will be the amount you currently have
in the bank account. This means its fine for real time payments but wont
be accepted to guarantee say a reservation since it wont be known if
you'll actually have funds to cover the reservation in the future.
|
| EAR |
Effective Annual Rate (EAR), Is the real
annual cost of an overdraft or Loan, stated as an annual rate, which
takes into account how often interest is charged to the account. All
other charges, such as arrangement fees must be shown separately from
the EAR. |
| Flexible Credit Card |
Accucard, Create Card
type credit cards
where the actual configuration can be altered by the user. |
| GAIN |
Gone away network information. Network
through which lenders share information on customers with debts who have
moved home without telling their lenders of a forwarding address.
Information may include recently known addresses. |
| Gold Card |
Normally it means the card has additional
benefits over and above normal credit cards and requires you to have a
higher credit rating than for the basic card. In practice given the wide
variation in offers and credit requirements by different brands it
really is relative to the other cards being offered by the same brand.
|
| Introductory Rate |
A special promotional rate for consumers
applying for and being accepted for a particular credit card for the
first time. |
| Mastercard |
One of the major institutions responsible
for facilitating the infrastructure allowing the flow of cash by
electronic means. Accepted at 32 million outlets worldwide. 900,000 +
ATM's worldwide. |
| Minimum Repayment |
The lowest amount that can be paid
towards an outstanding balance. Can be a fixed amount or percentage of
total. |
| P.A. |
per annum |
| PIN |
Personal identification number used for
ATM's and other services. |
| Platinum Card
|
Normally it means the card has additional
benefits over and above normal credit cards and gold cards and requires
you to have a higher credit rating than for the basic or gold card. In
practice given the wide variation in offers and credit requirements by
different brands it really is relative to the other cards being offered
by the same brand. |
| Purchase Protection
|
Schemes that will provide various levels
of cover for goods purchased with your credit card. |
| Secured Credit Cards |
A credit card normally used by those with
a poor credit history and now trying to rebuild their credit rating. The
credit limit is actually funds that you have previously deposited. It is
in affect much like a debit card but with the benefits of a credit card. |
| Standard Rate
|
The current long term rate of a credit
card disregarding special time limited promotions. |
| Store Card |
Credit cards issued by stores for use
within that store only. |
| Typical Rate |
credit cards will offer a range of APR
interest rates according to your personal circumstances, however in most
cases users are offered the same rate which is termed as being the
Typical Rate. Under the Consumer Credit (Advertisements) Regulations
2004 the typical rate is where at least 66% of applicants would expect
to receive that rate. |
| Unsecured Credit Cards
|
The normal type of credit card that does
not require it to be pre-funded. |
| Variable |
where the interest rate offered is liable change it is
described as a variable rate. |
| Visa |
One of the major institutions responsible
for facilitating the infrastructure allowing the flow of cash by
electronic means. Accepted at 20 million outlets worldwide. 800,000 +
ATM's worldwide. |
