Credit Cards

Credit Card Glossary: Terms and Definitions

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qualifying ratio

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X (Regulation X)

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yield on earning assets

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1099

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The 1099-C is an IRS form sent when credit card or other consumer debts are forgiven or canceled by creditors or debt collectors. Forgiven debt totaling more than $600 of the original debt is considered income by the IRS and potentially subject to taxes on federal income tax returns.

1099-C

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The 1099-C is an IRS form sent when credit card or other consumer debts are forgiven or canceled by creditors or debt collectors. Forgiven debt totalling more than $600 of the original debt is considered income by the IRS and potentially subject to taxes on federal income tax returns.

Account number

2010-01-21T06:39:00.000-08:00

An account number is a unique number assigned by a financial institution to a credit card customer. On a credit card, the account number is usually embossed and encoded on the face of the plastic.

Acquiring financial institution

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An acquiring financial institution is a bank that processes and settles a merchant's daily credit card transactions, and then in turn settles those transactions with the card issuer/association. Merchants must maintain such an account to receive credit for credit card transactions. Daily card transaction totals are deposited in the merchant's account after settlement and discount fees are deducted. In this way, such a financial institution acquires, or serves as the intermediary, to facilitate the credit transaction and pays the merchant, less a discount fee for the service.

Acquisition

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Acquisition is the credit card industry's term for acquiring consumers and businesses as credit card customers.

Adjusted balance

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The adjusted balance method is a formula many card issuers use to calculate monthly payments. Issuers subtract payments made during the month on a credit card account, along with adding finance charges incurred.

Additional cardholder

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When you have a credit card, it is often possible to add an additional card to the account for use by someone else. The main cardholder remains responsible for making payments on all charges made, whether by the original cardholder or the additional cardholder.

Algorithm

2010-01-21T06:35:00.001-08:00

An algorithm is a predetermined, finite set of steps or calculations in which data are rigorously analyzed. In credit scoring, algorithms are the complex set of calculations that analyze a person's or a business's past behavior with credit to determine the level of risk that person or business carries for future loans.

Affinity card

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An affinity card is a credit card offered in conjunction with two organizations, one a card issuer and the other a nonfinancial group with which consumers have an affinity. Universities, sports franchises and nonprofit organizations are examples of affinity groups that often offer special discounts or deals for using their credit cards issued in partnership with a major bank.

American Express

2010-01-21T06:34:00.001-08:00

Amerian Express, often called AmEx, is one of the main international credit card issuing schemes. American Express issues its own credit cards -- unlike Visa and MasterCard -- and is responsible for its own relationships with retailers.

Alternative methods of payment (AMOP)

2010-01-21T06:34:00.000-08:00

Alternative methods of payment (AMOP) is a term covers the spectrum of noncash payments, including: credit and debit cards; billing extensions (adding purchases to your telephone or cable TV bill, for example); value access services (frequent flier programs, credit card bonus programs, etc.)

Annual fee

2010-01-21T06:33:00.000-08:00

An annual (yearly) fee charged by a credit card company each year for use of a credit card. This is a separate fee from interest rate on purchases. While annual fees were once common, they largely disappeared in the '80s and '90s, remaining only on a few classes of cards, such as secured cards or those that offer airline frequent flier miles as a reward. After the passage of the Credit CARD Act of 2009, which imposed restrictions on card issuers' once-free hand to charge whatever they liked, annual fees began to make a comeback.

Annual percentage rate (APR)

2010-01-21T06:32:00.000-08:00

The annual percentage rate (APR) is the interest rate charged on credit card balances expressed in a standardized, annualized way. This rate is applied each month that an outstanding balance is present.

Related Terms: balance-to-limit ratio, cash back, chapter 11 bankruptcy, chapter 13 bankruptcy, chapter 7 bankruptcy, charge-off rate, co-branded card, co-signer, collection, concierge service, cramdown, debt consolidation, debt management plan (dmp), default, delinquent account, floor, forbearance, go-to rate, introductory rate (or intro apr), late payment fee, loyalty programs, penalty rate, piggybacking, private label, rate tart, roll rate, secured credit cards, setup fee, teaser rate, tiered rewards, unsecured credit cards, utilization ratio, zombie debt

Application fee

2010-01-21T06:31:00.001-08:00

An application fee is often charged on credit cards for people with bad credit. Consumers should make sure to ask how much the fee is and how it is applied. Beware of cards that apply fees to the credit card and eat up most of its credit limit.

Application

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A credit card application is the document a consumer or consumers sign to request a credit card. It typically asks for personal information such as income and Social Security number to help the card issuer decide whether to extend credit and at what rate. Who signs the application is particularly important. If a husband and wife both apply, for example, then both become individually responsible for the entire debt.

Approval response

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An approval response is an authorization that is received by a merchant when a transaction is approved.

APR

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APR stands for annual percentage rate, and it is the interest rate charged on credit card balances expressed in a standardized, annualized way. The APR is applied each month that an outstanding balance is present on a credit card.

Related Terms: average daily balance, bank holding company, bankruptcy, billing statement, card member agreement, carders, carding, carding forums, cashing, chapter 11 bankruptcy, chapter 13 bankruptcy, cob fraud, community property, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit history, credit union, dd (regulation dd), direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, finance charge, fraud alert, fraudulent transaction, fraudulent user, fulls, interest rate cap, joint credit, man in the middle fraud, mandatory binding arbitration, medical identity theft, monthly statement, mutual savings bank, national bank, nondischargeable debt, periodic statement, phishing, pin cashing, prime rate (or prime interest rate), receipt, regulation dd, regulation x, savings and loan association, savings bank, schumer box, signature strip, skimming, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, wage garnishment, x (regulation x), z (regulation)

Arbitrage

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Arbitrage, also called stoozing, is the practice of taking a free or low interest loan from a credit card company, depositing it in a high-yield savings account, making the minimum payments on the card and pocketing the difference. Consumers who practice arbitrage make money on the interest rate spread between money received and money paid -- just like a bank.

Association

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A credit card association is a group of card-issuing banks or organizations that set common transaction terms for merchants, issuers and acquirers. Some major associations are Visa, MasterCard, American Express and Discover.

Related Terms: authentication, authorization, authorization date, authorization only, authorized amount, authorized transaction, bank identification number (bin), carbon-paper packets, card issuer, card present transactions, card reader, charge-back, charge-back period, debit card, discount rate, discover card, encryption, floor limit, in-house, interchange fee, key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, per transaction fees, pin (personal identification number), point of sale (pos), post date, settlement bank, user authentication

Arbitration

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Arbitration is an alternative dispute resolution technique that keeps disputes out of the courts. In the credit card industry, consumers usually must accept mandatory and binding arbitration in order to obtain a credit card. IIt eliminates the cardholder's right to sue the credit card issuer, and instead, forces the parties to settle disputes before an arbitrator.

ATM (Automated Teller Machine)

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An ATM, or automated teller machine, is an interactive terminal with a touch screen or keypad that allows consumers with credit cards or debit cards to withdraw cash, check balances and/or make deposits using the magnetically encoded card to perform transactions. Most ATMs are interconnected via networks, allowing consumers to conduct banking or credit card business anywhere in the world.

Authentication

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Authentication is the process of assuring that a credit card transaction has been initiated by an authorized user of that card. From the merchant's point of view, authentication means getting the right information from the consumer, and having it verified by the transaction network. In recent years, authentication has been stepped up by means including security codes on credit cards.

Related Terms: association, authorization, authorization date, authorization only, authorized amount, authorized transaction, bank identification number (bin), blocks, carbon-paper packets, card issuer, card present transactions, card reader, charge-back, charge-back period, closed loop, credit card number, deadbeat, debit card, discount rate, discover card, dormant account, encryption, floor limit, gift card, hold, in-house, interchange fee, issuer identification number (iin), key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, open loop, per transaction fees, pin (personal identification number), point of sale (pos), post date, private label, settlement bank, signature strip, transactor, user authentication, void transaction, zip-zap machine

Authorization code

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A code that an issuer or its authorizing processor provides to indicate approval or denial for an authorization request.

Authorization

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Authorization is an important concept for both credit cardholders and credit card merchant accounts. Every retailer has a purchase limit above which they must seek authorization from the card issuer before they can complete the sale. Such authorization can be done by telephone or electronically at the cash register. Authorization is used to control credit card fraud. Authorization is also the first step in processing a credit card. After a merchant swipes the card, the data is submitted to merchant’s bank, called an acquirer, to request authorization for the sale. The acquirer then routes the request to the card-issuing bank, where it is authorized or denied, and the merchant is allowed to process the sale.

Related Terms: association, authentication, authorization date, authorization only, authorized amount, authorized transaction, bank identification number (bin), carbon-paper packets, card issuer, card present transactions, card reader, charge-back, charge-back period, debit card, discount rate, discover card, encryption, floor limit, in-house, interchange fee, key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, per transaction fees, pin (personal identification number), point of sale (pos), post date, settlement bank, user authentication

Authorization date

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The authorization date and time is the date annd time when a credit card transaction is approved.

Related Terms: association, authentication, authorization, authorization only, authorized amount, authorized transaction, bank identification number (bin), carbon-paper packets, card issuer, card present transactions, card reader, charge-back, charge-back period, debit card, discount rate, discover card, encryption, floor limit, in-house, interchange fee, key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, per transaction fees, pin (personal identification number), point of sale (pos), post date, settlement bank, user authentication

Authorization only

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An authorization only transaction is a transaction that is created to reserve an amount against a credit card's available limit for intended purchases; an authorization only transaction is intended for a merchant's protection, to assure that the credit card has a limit high enough to allow a transaction.

Related Terms: association, authentication, authorization, authorization date, authorized amount, authorized transaction, bank identification number (bin), carbon-paper packets, card issuer, card present transactions, card reader, charge-back, charge-back period, debit card, discount rate, discover card, encryption, floor limit, in-house, interchange fee, key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, per transaction fees, pin (personal identification number), point of sale (pos), post date, settlement bank, user authentication

Authorized transaction

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In credit card terminology, an authorized transaction is one that has been approved.

Related Terms: association, authentication, authorization, authorization date, authorization only, authorized amount, bank identification number (bin), carbon-paper packets, card issuer, card present transactions, card reader, charge-back, charge-back period, debit card, discount rate, discover card, encryption, floor limit, in-house, interchange fee, key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, per transaction fees, pin (personal identification number), point of sale (pos), post date, settlement bank, user authentication

Authorized amount

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In routine credit card transactions, the authorized amount is the approved amount of money to be charged. After transactions are approved, the authorized amount is deducted from the amount of available credit.

Related Terms: association, authentication, authorization, authorization date, authorization only, authorized transaction, bank identification number (bin), blocks, carbon-paper packets, card issuer, card present transactions, card reader, charge-back, charge-back period, closed loop, credit card number, deadbeat, debit card, discount rate, discover card, dormant account, encryption, floor limit, gift card, hold, in-house, interchange fee, issuer identification number (iin), key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, open loop, per transaction fees, pin (personal identification number), point of sale (pos), post date, private label, settlement bank, signature strip, transactor, user authentication, void transaction, zip-zap machine

Authorized user

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An authorized user is any person who has permission to use a credit card account, but is not responsible for paying the bill. In that way, it differs from joint credit, in which both parties are obliged to pay. In some cases, the user will receive a credit card in his or her name, even though it is linked to someone else's account.

Related Terms: automatic payment, available credit, balance-to-limit ratio, bank, bank card, billing cycle, cash advance fee, debtor, deferred interest, deleveraging, expired card, finance charge, foreign transaction fee, hold, inactive account, margin, mcc (merchant category codes), merchant category code (mcc), new balance, over-limit, overdraft protection, pay to pay, purchase rate, revolving line of credit, service charge, terms and conditions, total finance charge, utilization ratio, zero balance

Automated teller machine (ATM)

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An interactive terminal with a touch screen or keypad that allows consumers with credit cards or debit cards to withdraw cash, check balances and/or make deposits using the magnetically encoded card to perform transactions. Most ATMs are interconnected via networks, allowing consumers to conduct banking or credit card business anywhere in the world.

Related Terms: bank account, cash advance check, chip-and-pin cards, credit life insurance, embossed, linked transfer account, near field communication, nfc, online bill presentment and payment, online financial transaction, payroll card, private label credit card, radio frequency identification, smart card, sms, stoozing, zip-zap machine

Automatic payment

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Automatic payment is a process that authorizes regular withdrawals to be made from checking or other deposit account to pay credit card and other bills.

Related Terms: authorized user, available credit, balance-to-limit ratio, bank, bank card, billing cycle, cash advance fee, debtor, deferred interest, deleveraging, expired card, finance charge, foreign transaction fee, hold, inactive account, margin, mcc (merchant category codes), merchant category code (mcc), new balance, over-limit, overdraft protection, pay to pay, purchase rate, revolving line of credit, service charge, terms and conditions, total finance charge, utilization ratio, zero balance

Available credit

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Available credit is the amount that is available to be charged to a credit card amount; the difference between the credit limit and outstanding charges on the account.

Related Terms: authorized user, automatic payment, balance-to-limit ratio, bank, bank card, billing cycle, cash advance fee, debtor, deferred interest, deleveraging, expired card, finance charge, foreign transaction fee, hold, inactive account, margin, mcc (merchant category codes), merchant category code (mcc), new balance, over-limit, overdraft protection, pay to pay, purchase rate, revolving line of credit, service charge, terms and conditions, total finance charge, utilization ratio, zero balance

Average daily balance

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Average daily balance is the method by which most credit cards calculate your payment due. An average daily balance is determined by adding each day's balance and then dividing that total by the number of days in the billing cycle.

Related Terms: apr, bank holding company, bankruptcy, billing statement, card member agreement, carders, carding, carding forums, cashing, chapter 11 bankruptcy, chapter 13 bankruptcy, cob fraud, community property, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit history, credit union, dd (regulation dd), direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, finance charge, fraud alert, fraudulent transaction, fraudulent user, fulls, interest rate cap, joint credit, man in the middle fraud, mandatory binding arbitration, medical identity theft, monthly statement, mutual savings bank, national bank, nondischargeable debt, periodic statement, phishing, pin cashing, prime rate (or prime interest rate), receipt, regulation dd, regulation x, savings and loan association, savings bank, schumer box, signature strip, skimming, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, wage garnishment, x (regulation x), z (regulation)

Bad credit

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A term used to describe poor credit rating. Common practices that can damage a credit rating include making late payments, skipping payments, exceeding card limits or declaring bankruptcy. "Bad Credit" can result in being denied future credit.

Balance

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On a credit card account or credit line, the balance is the amount owed.

Balance transfer fee

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A balance transfer fee is a fee charged by a credit card company to transfer a balance from one account to another. This fee can be anywhere from 1 percent to 5 percent of the balance amount. The fee may or may not have a cap -- in other words, a maximum amount. Contact the credit card issuer for their specific fees.

Related Terms: balance transfer, debt consolidation, joint account

Balance transfer

2009-12-21T06:12:00.000-08:00

A balance transfer occurs when the outstanding balance of one credit card (or several credit cards) is moved to another credit card account. This is often done by consumers looking for a lower interest rate. Many credit card issuers offer introductory balance transfer APRs that are lower than the standard rates. Balance transfers usually have fees.

Related Terms: balance transfer fee, debt consolidation, joint account

Bank

2009-12-21T06:11:00.001-08:00

We all know what a bank is -- a financial institution that may take in deposits, lend money or both. But in credit card transactions, multiple banks can and usually are involved, with each bank playing different roles. One bank may issue a credit card to a consumer, another may represent the merchant, and a third may be involved in payment of a credit card bill.

Related Terms: authorized user, automatic payment, available credit, balance-to-limit ratio, bank card, billing cycle, cash advance fee, debtor, deferred interest, deleveraging, expired card, finance charge, foreign transaction fee, hold, inactive account, margin, mcc (merchant category codes), merchant category code (mcc), new balance, over-limit, overdraft protection, pay to pay, purchase rate, revolving line of credit, service charge, terms and conditions, total finance charge, utilization ratio, zero balance

Balance-to-limit ratio

2009-12-21T06:11:00.000-08:00

Balance-to-limit ratio is used in the calculation of credit scores. It compares the amount of credit being used to the total credt available to the borrower. Having a low ratio -- in other words, not much debt but a lot of available credit -- is good for your credit score. Also known as a credit utilization ratio.

Related Terms: annual percentage rate (apr), authorized user, automatic payment, available credit, bank, bank card, basis point, billing cycle, cash advance fee, chapter 11 bankruptcy, chapter 13 bankruptcy, chapter 7 bankruptcy, charge-off rate, co-signer, collection, consumer credit file, cramdown, credit bureau, credit bureau risk score, credit card, credit card number, credit freeze, credit inquiry, credit limit, credit line, credit monitoring service, credit obligation, credit rating, credit report, credit reporting agency (cra), credit score, credit utilization ratio, debt, debt management plan (dmp), debt-to-income ratio, debt-to-limit ratio, debtor, default, deferred interest, deleveraging, delinquent account, double-cycle billing, expired card, fico score, finance charge, float, forbearance, foreign transaction fee, grace period, hard inquiry, hard pull, hold, inactive account, index, inquiry, introductory period, introductory rate (or intro apr), issuer, joint account, joint credit, late payment fee, line of credit, magnetic stripe, margin, mcc (merchant category codes), merchant category code (mcc), minimum finance charge, minimum payment, monthly periodic rate, new balance, opt out, over-limit, overdraft protection, pay to pay, payment due date, penalty rate, piggybacking, pin (personal identification number), purchase rate, qualifying ratio, revolving line of credit, roll rate, secured credit cards, service charge, setup fee, terms and conditions, thin file, total finance charge, unsecured credit cards, utilization ratio, vantagescore, wall street journal prime rate, z score, z score, zero balance, zombie debt

Bank account

2009-12-21T06:10:00.000-08:00

A bank account, in consumer terms, is a place to place deposits, acquire loans or both. Bank accounts used to be necessary for credit card or debit transactions, but with the advent of various prepaid products, an individual bank account is no longer required of cardholders.

Related Terms: automated teller machine (atm), cash advance check, chip-and-pin cards, credit life insurance, embossed, linked transfer account, near field communication, nfc, online bill presentment and payment, online financial transaction, payroll card, private label credit card, radio frequency identification, smart card, sms, stoozing, zip-zap machine

Bank holding company

2009-12-21T06:09:00.001-08:00

A bank holding company is a firm that owns or controls interest in one or more U.S. banks. All of the largest credit card issuers have, at the top of their corporate structure, a bank holding company. Bank holding companies are regulated by the Federal Reserve Board. The board is responsible for regulating and supervising bank holding companies, even if the bank owned by the holding company is regulated by another state or federal agency.

Related Terms: apr, average daily balance, bankruptcy, billing statement, card member agreement, carders, carding, carding forums, cashing, chapter 11 bankruptcy, chapter 13 bankruptcy, cob fraud, community property, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit history, credit union, dd (regulation dd), direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, finance charge, fraud alert, fraudulent transaction, fraudulent user, fulls, interest rate cap, joint credit, man in the middle fraud, mandatory binding arbitration, medical identity theft, monthly statement, mutual savings bank, national bank, nondischargeable debt, periodic statement, phishing, pin cashing, prime rate (or prime interest rate), receipt, regulation dd, regulation x, savings and loan association, savings bank, schumer box, signature strip, skimming, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, wage garnishment, x (regulation x), z (regulation)

Bank card

2009-12-21T06:09:00.000-08:00

A bank card is a payment card issued by a bank. It may be a debit card, where money is paid in before a transaction can take place, or it may be a credit card, in which a loan is given. Sometimes spelled bankcard.

Related Terms: authorized user, automatic payment, available credit, balance-to-limit ratio, bank, billing cycle, breakage, breakage, cash advance fee, cash card, chip-and-pin cards, closed loop, debit card, debtor, deferred interest, deleveraging, distributor, expired card, finance charge, foreign transaction fee, gift card, hold, inactive account, man in the middle fraud, margin, mcc (merchant category codes), merchant category code (mcc), new balance, open loop, over-limit, overdraft protection, pay to pay, payments network, prepaid cards, processor, program manager, purchase rate, reloadable card, revolving line of credit, rfid, service charge, smart card, spoilage, terms and conditions, total finance charge, transaction identifier, utilization ratio, zero balance

Bank identification number (BIN)

2009-12-21T06:08:00.000-08:00

A bank identification number (BIN) is the first six digits of a Visa or MasterCard account number. The bank identification number is used to identify the card-issuing institution.

Related Terms: association, authentication, authorization, authorization date, authorization only, authorized amount, authorized transaction, batching, business card (business credit card), carbon-paper packets, card issuer, card present transactions, card reader, charge-back, charge-back period, clearing, commercial cards, corporate card, debit card, discount rate, discover card, encryption, fleet cards, floor limit, funding, in-house, interchange fee, key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, per transaction fees, pin (personal identification number), point of sale (pos), post date, settlement bank, user authentication, z score

Basis point

2009-12-21T06:07:00.001-08:00

A basis point is one-hundredth of 1 percentage point. If your credit card rate goes from 16.49 to 16.99 percent, it has risen 50 basis points.

Related Terms: balance-to-limit ratio, credit card, credit card number, debt, double-cycle billing, float, foreign transaction fee, grace period, index, introductory period, introductory rate (or intro apr), issuer, joint account, joint credit, line of credit, magnetic stripe, minimum finance charge, minimum payment, monthly periodic rate, new balance, payment due date, penalty rate, pin (personal identification number), utilization ratio

Bankruptcy

2009-12-21T06:07:00.000-08:00

In bankruptcy, consumers or businesses seek legal assistance when bills cannot be paid. There are different types of bankruptcies. In some, debts are discharged. In others, debts are restructured and repaid under bankruptcy court supervision. Whatever the type, bankruptcy has a negative effect on the ability to borrow.

Related Terms: apr, average daily balance, bank holding company, billing statement, card member agreement, carders, carding, carding forums, cashing, chapter 11 bankruptcy, chapter 13 bankruptcy, cob fraud, community property, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit history, credit union, dd (regulation dd), direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, finance charge, fraud alert, fraudulent transaction, fraudulent user, fulls, interest rate cap, joint credit, man in the middle fraud, mandatory binding arbitration, medical identity theft, monthly statement, mutual savings bank, national bank, nondischargeable debt, periodic statement, phishing, pin cashing, prime rate (or prime interest rate), receipt, regulation dd, regulation x, savings and loan association, savings bank, schumer box, signature strip, skimming, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, wage garnishment, x (regulation x), z (regulation)

Billing cycle

2009-12-21T06:06:00.001-08:00

The billing cycle is the time between billing statements. With credit card statements, the time between billing statements may vary.

Related Terms: authorized user, automatic payment, available credit, balance-to-limit ratio, bank, bank card, cash advance fee, debtor, deferred interest, deleveraging, expired card, finance charge, foreign transaction fee, hold, inactive account, margin, mcc (merchant category codes), merchant category code (mcc), new balance, over-limit, overdraft protection, pay to pay, purchase rate, revolving line of credit, service charge, terms and conditions, total finance charge, utilization ratio, zero balance

Batching

2009-12-21T06:06:00.000-08:00

The second step in processing a credit card. At the end of a day, the merchant reviews all the day’s sales to ensure they were authorized and signed by the cardholder. It then transmits all the sales at once, called a batch, to the acquirer to receive payment.

Related Terms: bank identification number (bin), business card (business credit card), clearing, commercial cards, corporate card, fleet cards, funding, z score

Blocks

2009-12-21T06:05:00.001-08:00

With credit and debit cards a "block" may be placed on a portion of a consumer's credit limit or available debit balance if the final amount of a transaction is unknown. That can happen at gas stations, restaurants or hotels, because the merchant can't know at the time the card is presented how much you'll pump, how much you'll tip or how many drinks you'll take from the minibar. Consumers near their credit or debit limits need to watch their available balances carefully, or the hold amount could push them over the limit, triggering a fee. Blocks, also called holds, are usually released within minutes or hours, but blocks can sometimes last days.

Related Terms: authentication, authorized amount, card reader, closed loop, credit card number, deadbeat, dormant account, floor limit, gift card, hold, in-house, issuer identification number (iin), open loop, private label, signature strip, transactor, void transaction, zip-zap machine

Billing statement

2009-12-21T06:05:00.000-08:00

A billing statement is a written record prepared by a financial institution, usually once a month, listing all credit card transactions for an account, including purchases, payments, fees and finance charges. It may be mailed to consumers or provided electronically online. Also called a monthly statement or periodic statement.

Related Terms: apr, average daily balance, bank holding company, bankruptcy, card member agreement, carders, carding, carding forums, cashing, chapter 11 bankruptcy, chapter 13 bankruptcy, cob fraud, community property, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit history, credit union, dd (regulation dd), direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, finance charge, fraud alert, fraudulent transaction, fraudulent user, fulls, interest rate cap, joint credit, man in the middle fraud, mandatory binding arbitration, medical identity theft, monthly statement, mutual savings bank, national bank, nondischargeable debt, periodic statement, phishing, pin cashing, prime rate (or prime interest rate), receipt, regulation dd, regulation x, savings and loan association, savings bank, schumer box, signature strip, skimming, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, wage garnishment, x (regulation x), z (regulation)

Breakage

2009-12-21T06:04:00.001-08:00

Breakage refers primarily to gift cards that are lost or left unused. It is also the portion of funds left on a partially used gift card that are never cashed out. Breakage is the reason that gift cards can sometimes be bought for less than face value, because the retailer can be sure a certain proportion will go unused. Also referred to as "spoilage."

Related Terms: bank card, cash card, chip-and-pin cards, closed loop, debit card, distributor, gift card, man in the middle fraud, open loop, payments network, prepaid cards, processor, program manager, reloadable card, rfid, smart card, spoilage, transaction identifier

BOGO

2009-12-21T06:04:00.000-08:00

A slang acronym meaning "Buy One Get One" -- as in buy one, get one free. While a wise shopping move for necessities, it too often is a lure to splurge on a credit card.

Business card (business credit card)

2009-12-21T06:03:00.000-08:00

A business credit card is sought by corporate executives or business owners in order to separate keep business expenses from personal charges. Often, business credit cards offer business oriented rewards, such as travel benefits.

Related Terms: bank identification number (bin), batching, clearing, commercial cards, corporate card, fleet cards, funding, z score

Business credit score

2009-12-21T06:00:00.000-08:00

A business credit score uses a firm's credit history to calculate a number indicating a company's risk, similar to what a consumer credit score does for borrowers. Also, known as a commercial credit score, the number predicts the likelihood of a company's late payment. The three leading business score issuers are commercial information firm Dun & Bradstreet and credit bureaus Equifax and Experian.

Carders

2009-11-21T17:53:00.000-08:00

Carders are the criminals who buy, sell, steal or conspire to hijack another person's credit or debit card account information.

Related Terms: apr, average daily balance, bank holding company, bankruptcy, billing statement, card member agreement, carding, carding forums, cashing, chapter 11 bankruptcy, chapter 13 bankruptcy, cob fraud, community property, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit history, credit union, dd (regulation dd), direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, finance charge, fraud alert, fraudulent transaction, fraudulent user, fulls, interest rate cap, joint credit, man in the middle fraud, mandatory binding arbitration, medical identity theft, monthly statement, mutual savings bank, national bank, nondischargeable debt, periodic statement, phishing, pin cashing, prime rate (or prime interest rate), receipt, regulation dd, regulation x, savings and loan association, savings bank, schumer box, signature strip, skimming, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, wage garnishment, x (regulation x), z (regulation)

Carbon-paper packets

2009-11-19T17:57:00.000-08:00

In the early days of credit cards, sales were transacted by using carbon-paper packets that fit into a simple sliding device called a zip-zap machine. The card would be put face-up in the zip-zap, a carbon-paper packet of alternating paper and carbon paper would be placed over it, and the tight-fitting slide would be run over both of them. The pressure of the slide would create an impression of the credit card number on the papers -- one for the customer, one for the merchant, one for the merchant's bank. Today, such transactions are rare; most are handled by electronic card readers that take the card information via its magnetic stripe.

Related Terms: association, authentication, authorization, authorization date, authorization only, authorized amount, authorized transaction, bank identification number (bin), card issuer, card present transactions, card reader, charge-back, charge-back period, debit card, discount rate, discover card, encryption, floor limit, in-house, interchange fee, key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, per transaction fees, pin (personal identification number), point of sale (pos), post date, settlement bank, user authentication

Card member

2009-11-19T17:56:00.001-08:00

A card member an industry term for an individual to whom a card is issued, or who is authorized to use an issued card. Sometimes spelled cardmember.

Card issuer

2009-11-19T17:56:00.000-08:00

Any financial institution, bank, credit union or company that issues (or causes to be issued) plastic cards to cardholders.

Related Terms: association, authentication, authorization, authorization date, authorization only, authorized amount, authorized transaction, bank identification number (bin), carbon-paper packets, card present transactions, card reader, charge-back, charge-back period, debit card, discount rate, discover card, encryption, floor limit, in-house, interchange fee, key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, per transaction fees, pin (personal identification number), point of sale (pos), post date, settlement bank, user authentication

Card present transactions

2009-11-19T17:55:00.001-08:00

Card present transactions are those in which a credit card is physically present. Merchants are charged different levels of fees by the card transaction proccessors (such as Visa, MasterCard), depending on the level of fraud risk. Card present transactions, because the card is available for inspection, are considered less risky and therefore carry lower fees than online or phone transactions.

Related Terms: association, authentication, authorization, authorization date, authorization only, authorized amount, authorized transaction, bank identification number (bin), carbon-paper packets, card issuer, card reader, charge-back, charge-back period, debit card, discount rate, discover card, encryption, floor limit, in-house, interchange fee, key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, per transaction fees, pin (personal identification number), point of sale (pos), post date, settlement bank, user authentication

Card member agreement

2009-11-19T17:55:00.000-08:00

The card member agreement provides the terms and conditions of a credit card account. This agreement is required by federal law as a consumer disclosure. It also represents a binding agreement between card issuers and their customers. It must include the annual percentage rate, the monthly minimum payment formula, annual fees and dispute resolution processes. Changes in the cardholder agreement can be made, with written advance notice, at any time by the issuer. Cardholders have the right to cancel their cards if they do not accept such changes in terms, and pay off existing balances under the previous account terms in such instances.

Related Terms: apr, average daily balance, bank holding company, bankruptcy, billing statement, carders, carding, carding forums, cashing, chapter 11 bankruptcy, chapter 13 bankruptcy, cob fraud, community property, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit history, credit union, dd (regulation dd), direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, finance charge, fraud alert, fraudulent transaction, fraudulent user, fulls, interest rate cap, joint credit, man in the middle fraud, mandatory binding arbitration, medical identity theft, monthly statement, mutual savings bank, national bank, nondischargeable debt, periodic statement, phishing, pin cashing, prime rate (or prime interest rate), receipt, regulation dd, regulation x, savings and loan association, savings bank, schumer box, signature strip, skimming, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, wage garnishment, x (regulation x), z (regulation)

Card reader

2009-11-19T17:54:00.000-08:00

A card reader is a device that is capable of reading the encoding on plastic cards. Card readers today are very common at the point of sale.

Related Terms: association, authentication, authorization, authorization date, authorization only, authorized amount, authorized transaction, bank identification number (bin), blocks, carbon-paper packets, card issuer, card present transactions, charge-back, charge-back period, closed loop, credit card number, deadbeat, debit card, discount rate, discover card, dormant account, encryption, floor limit, gift card, hold, in-house, interchange fee, issuer identification number (iin), key, mail/phone order merchant, mail/phone order transaction, mastercard, mastercard acquirer, mastercard card, mastercard issuer, merchant agreement, merchant bank, open loop, per transaction fees, pin (personal identification number), point of sale (pos), post date, private label, settlement bank, signature strip, transactor, user authentication, void transaction, zip-zap machine

Carding

2009-11-19T17:53:00.000-08:00

In the credit card world, carding is a term for the activities of carders -- thieves who use various means to illegally acquire and use credit or debit card account information for their own gain.

Related Terms: apr, average daily balance, bank holding company, bankruptcy, billing statement, card member agreement, carders, carding forums, cashing, chapter 11 bankruptcy, chapter 13 bankruptcy, cob fraud, community property, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit history, credit union, dd (regulation dd), direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, finance charge, fraud alert, fraudulent transaction, fraudulent user, fulls, interest rate cap, joint credit, man in the middle fraud, mandatory binding arbitration, mcc (merchant category codes), medical identity theft, merchant category code (mcc), monthly statement, mutual savings bank, national bank, national issuers, nondischargeable debt, office of thrift supervision, periodic statement, phishing, pin cashing, prime rate (or prime interest rate), receipt, regulation dd, regulation x, savings and loan association, savings bank, schumer box, signature strip, skimming, state bank, terms and conditions, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, wage garnishment, x (regulation x), z (regulation)

Cash advance

2009-11-19T17:52:00.001-08:00

A cash advance is a cash loan from a credit card, using an ATM, a bank withdrawal or "convenience" checks. Credit card cash advances have many disadvantages for consumers. Generally, you cannot take a cash advance for the full amount of your available credit. The interest rate on cash advances is often significantly higher than it is on purchases or balance transfers. If you carry balancnes with both high-interest cash advances and low-interest purchases on the same card, it is current industry practice to apply payments to the low-rate balance first, increasing total interest rate costs. A transaction fee, which is a percentage of the cash advance, is usually charged. There is typically no grace period for cash advances.

Carding forums

2009-11-19T17:52:00.000-08:00

Carding forums are Web sites used to exchange information and technical savvy about the illicit trade of stolen credit or debit card account information.

Related Terms: apr, average daily balance, bank holding company, bankruptcy, billing statement, card member agreement, carders, carding, cashing, chapter 11 bankruptcy, chapter 13 bankruptcy, cob fraud, community property, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit history, credit union, dd (regulation dd), direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, finance charge, fraud alert, fraudulent transaction, fraudulent user, fulls, interest rate cap, joint credit, man in the middle fraud, mandatory binding arbitration, mcc (merchant category codes), medical identity theft, merchant category code (mcc), monthly statement, mutual savings bank, national bank, national issuers, nondischargeable debt, office of thrift supervision, periodic statement, phishing, pin cashing, prime rate (or prime interest rate), receipt, regulation dd, regulation x, savings and loan association, savings bank, schumer box, signature strip, skimming, state bank, terms and conditions, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, wage garnishment, x (regulation x), z (regulation)

Cash advance check

2009-11-19T17:51:00.001-08:00

A cash advance check is a check that is drawn against a credit line, rather than against a checking account balance. Cash advance checks are periodically provided to cardholders and generally result in cash advance fees when used. Also called convenience checks.

Related Terms: automated teller machine (atm), bank account, chip-and-pin cards, credit life insurance, embossed, linked transfer account, near field communication, nfc, online bill presentment and payment, online financial transaction, payroll card, private label credit card, radio frequency identification, smart card, sms, stoozing, zip-zap machine

Cash advance fee

2009-11-19T17:51:00.000-08:00

A cash advance fee is a charge that a credit card issuer charges a customer for accessing the cash credit line on his or her account, either through an ATM, convenience check or at a bank's teller window. The fee is a percentage of the amount withdrawn, usually with a minimum dollar amount charged for smaller transactions. Finance charges typically accrue from the date of the advance, without a normal grace period that is present with purchases.

Related Terms: authorized user, automatic payment, available credit, balance-to-limit ratio, bank, bank card, billing cycle, debtor, deferred interest, deleveraging, expired card, finance charge, foreign transaction fee, hold, inactive account, margin, mcc (merchant category codes), merchant category code (mcc), new balance, over-limit, overdraft protection, pay to pay, purchase rate, revolving line of credit, service charge, terms and conditions, total finance charge, utilization ratio, zero balance

Cash back

2009-11-19T17:50:00.001-08:00

In the credit card industry, cash back refers to a rewards program that returns to you a percentage of the total amount spent on your credit card over a specific period of time, usually monthly or quarterly. This feature is particularly useful if you normally pay your credit card bills in full each month, as it means you get an effective discount on the products bought with your credit card.

Related Terms: annual percentage rate (apr), co-branded card, concierge service, loyalty programs, private label, tiered rewards

Cash advance rate

2009-11-19T17:50:00.000-08:00

When consumers take out cash advances, they are usually charged a higher rate. The cash advance rate is higher because these loans are viewed as riskier for banks. The interest rate is typically charged from the moment of the cash advance.

Cash card

2009-11-19T17:49:00.000-08:00

A cash card is a card loaded with a preset value that can be used to withdraw money from ATMs. Depending on the issuer, a cash card can also be used to make purchases. It differs from a check card because it is not linked to an individual's bank account.

Related Terms: bank card, breakage, breakage, chip-and-pin cards, closed loop, debit card, distributor, gift card, man in the middle fraud, open loop, payments network, prepaid cards, processor, program manager, reloadable card, rfid, smart card, spoilage, transaction identifier

Cashing

2009-11-19T17:48:00.000-08:00

Cashing is a form of carding that involves using stolen credit card or debit card information to directly withdraw cash from an identity theft victim's credit line, credit card or bank account. Also known as "PIN cashing."

Related Terms: apr, average daily balance, bank holding company, bankruptcy, billing statement, card member agreement, carders, carding, carding forums, chapter 11 bankruptcy, chapter 13 bankruptcy, cob fraud, community property, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit history, credit union, dd (regulation dd), direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, finance charge, fraud alert, fraudulent transaction, fraudulent user, fulls, interest rate cap, joint credit, man in the middle fraud, mandatory binding arbitration, medical identity theft, monthly statement, mutual savings bank, national bank, nondischargeable debt, periodic statement, phishing, pin cashing, prime rate (or prime interest rate), receipt, regulation dd, regulation x, savings and loan association, savings bank, schumer box, signature strip, skimming, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, wage garnishment, x (regulation x), z (regulation)

Chapter 13 bankruptcy

2009-11-19T17:47:00.001-08:00

Under Chapter 13 bankruptcy, a creditor repays debts under a three- to five-year plan that is supervised by the bankruptcy court. Chapter 13 bankruptcy was encouraged by the 2005 revision to bankruptcy law, which sought to force more debtors to repay debts.

Related Terms: annual percentage rate (apr), apr, average daily balance, balance-to-limit ratio, bank holding company, bankruptcy, billing statement, card member agreement, carders, carding, carding forums, cashing, chapter 11 bankruptcy, chapter 7 bankruptcy, charge-off rate, co-signer, cob fraud, collection, community property, cramdown, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit history, credit union, dd (regulation dd), debt management plan (dmp), default, delinquent account, direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, finance charge, forbearance, fraud alert, fraudulent transaction, fraudulent user, fulls, interest rate cap, joint credit, late payment fee, man in the middle fraud, mandatory binding arbitration, medical identity theft, monthly statement, mutual savings bank, national bank, nondischargeable debt, penalty rate, periodic statement, phishing, piggybacking, pin cashing, prime rate (or prime interest rate), receipt, regulation dd, regulation x, roll rate, savings and loan association, savings bank, schumer box, secured credit cards, setup fee, signature strip, skimming, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, utilization ratio, wage garnishment, x (regulation x), z (regulation), zombie debt

Chapter 11 bankruptcy

2009-11-19T17:47:00.000-08:00

Chapter 11 bankruptcy is a legal procedure that allows businesses to reorganize under a court-approved plan. Chapter 11 bankruptcy allows business entities protection from creditors during the reorganization period.

Related Terms: annual percentage rate (apr), apr, average daily balance, balance-to-limit ratio, bank holding company, bankruptcy, billing statement, card member agreement, carders, carding, carding forums, cashing, chapter 13 bankruptcy, chapter 7 bankruptcy, charge-off rate, co-signer, cob fraud, collection, community property, consumer credit file, cramdown, credit bureau, credit bureau risk score, credit card accountability, responsibility and disclosure act of 2009, credit card act of 2009, credit freeze, credit history, credit inquiry, credit limit, credit line, credit monitoring service, credit obligation, credit rating, credit report, credit reporting agency (cra), credit score, credit union, credit utilization ratio, dd (regulation dd), debt management plan (dmp), debt-to-income ratio, debt-to-limit ratio, default, delinquent account, direct mail, double-cycle billing, drop, dump, equal credit opportunity act (ecoa), equitable division, fair credit billing act, federal deposit insurance corporation, federal funds rate, federal reserve board, fico score, finance charge, forbearance, fraud alert, fraudulent transaction, fraudulent user, fulls, hard inquiry, hard pull, inquiry, interest rate cap, joint credit, late payment fee, man in the middle fraud, mandatory binding arbitration, medical identity theft, monthly statement, mutual savings bank, national bank, nondischargeable debt, opt out, penalty rate, periodic statement, phishing, piggybacking, pin cashing, prime rate (or prime interest rate), qualifying ratio, receipt, regulation dd, regulation x, roll rate, savings and loan association, savings bank, schumer box, secured credit cards, setup fee, signature strip, skimming, thin file, thrift, time-barred debt, tranche, truncation, truth in lending act, truth in lending act, truth in savings act, two-cycle billing, universal default, unsecured credit cards, utilization ratio, vantagescore, wage garnishment, wall street journal prime rate, x (regulation x), z (regulation), z score, z score, zombie debt

Chapter 7 bankruptcy

2009-11-19T17:46:00.000-08:00

Chapter 7 bankruptcy is the most common type of bankruptcy filing for individuals who can no longer pay their bills. While this legal procedure allows debt to be discharged, it is ruinous to credit records, meaning that future loans will be very expensive, if they can be found at all.

Related Terms: annual percentage rate (apr), balance-to-limit ratio, chapter 11 bankruptcy, chapter 13 bankruptcy, charge-off rate, co-signer, collection, consumer credit file, cramdown, credit bureau, credit bureau risk score, credit freeze, credit inquiry, credit limit, credit line, credit monitoring service, credit obligation, credit rating, credit report, credit reporting agency (cra), credit score, credit utilization ratio, debt management plan (dmp), debt-to-income ratio, debt-to-limit ratio, default, delinquent account, fico score, forbearance, hard inquiry, hard pull, inquiry, late payment fee, opt out, penalty rate, piggybacking, qualifying ratio, roll rate, secured credit cards, setup fee, thin file, unsecured credit cards, utilization ratio, vantagescore, wall street journal prime rate, z score, z score, zombie debt