Row of credit cards on top of eachother

Credit card glossary

By  , last updated


Adverse credit:  This refers to people with a low credit score that has resulted from the previous mis-management of debt. 

Affinity/Contribution cards:  Credit cards that are produced in partnership with a particular organisation or charity such as a sports team.  A percentage of every transaction charged to the card will go to the organisation, allowing you to show your support. They may also receive a payment when you first use the card.

APR:  Annual percentage rate. The ‘representative’ APR is the rate that has to be offered to 51% of customers applying for the credit card. So even if this is the rate advertised it may not be what you actually get. 

ATM cash withdrawal: Using your credit card to withdraw cash from an ATM. This is expensive though – you’ll be charged a withdrawal fee. The interest rates on cash withdrawals are usually higher than those charged for purchases and balance transfers. Interest is also charged from the day the withdrawal is made.

Authorised user:  A person who is authorised to use the main cardholder’s credit card account, but isn’t responsible for repaying the balance.

Available credit:  The amount of money available on your credit card minus any outstanding balance, along with authorised but unposted transactions.

Balance transfer:  A balance transfer credit card allows you to move credit card debt from one issuer to another.     

Card issuer:  The provider you get your credit card from.

Cash advance: Using your credit card to withdraw cash from an ATM. 

Chip and PIN:  The four digit number you will be given to allow you to spend on your card.

Credit card cheque:   A cheque where the money is debited from your credit card, as opposed to your current account. This is an expensive way of paying though – you’ll be charged a fee on the credit card and a higher rate of interest than is applied to purchases and balance transfers.

CCA:  Otherwise known as the Consumer Credit Act 1974. It was updated in 2006 and is legislation designed to protect consumers when they are borrowing money.  

CCD:  The Consumer Credit Directive was introduced in February 2011 and was designed to help people decide what credit product is best for them by making the process easier, clearer and more transparent.  

Credit limit: The maximum amount of money you have access to on your credit card. If you exceed this limit you will incur penalty fees and the transaction may be declined.

Credit rating: If you are trying to borrow money, lenders will use your credit rating to determine your suitability. It is usually scored out of 1,000 and shows how responsible a borrower you are.  


Debit card:   A debit card gives you access to money available in your current account. You can use it to make purchases either in store or online, as well as make withdrawals from ATMs.

Direct Debit:  This is a transaction set up with your bank that allows you to make one-off or regular payments to the account of an organisation or another person. You choose a date on which you want the payment to be made, and the money will leave your account on that day. 

Euro:  The currency used by most members of the European Union.

FSA: The Financial Services Authority, this organisation is the regulator of all UK financial services in the UK.

Interest:  Interest is a charge applied by banks for lending you money. It is calculated as a percentage of your balance.

Interest-free period:  This is a period offered by a credit card when you are not charged any interest. It is the time between the date you buy something and the date when your monthly bill is due. Some credit cards offer extended interest-free periods for new customers.


Joint account holder: This gives both holders of a joint credit card account equal access, responsibility and authority.

Main cardholder: The responsibility for the repayment of the account balance of the credit card falls with this person.

Minimum payment: The minimum amount you must pay off your balance each month. 

Outstanding balance:  Money that you owe on your credit card.

Payment due date: Make sure that on your payment due date you pay off at least the agreed minimum amount. If you are late making a payment you will be charged a penalty and it could affect your credit score. 

Payment protection insurance (PPI):  Payment protection insurance (PPI) is an insurance you can opt to take out to protect you if you were unable to make your credit card repayments due to illness or redundancy. The insurance provider will either pay a percentage or help you to meet the monthly repayments.

Promotional rate: This will be a short term rate on your account until a particular date. After this you will be charged the standard rate of interest.


Statement: You will receive this each month and it will help you to keep tabs on exactly what you are spending. It will show what you’ve spent and owe and the minimum you can pay for that month. It will also show the date your payment is due. 

Statement date: This is the final day of your monthly statement period. Any transactions after this date will show up on your statement the following month.

Store cards: These are available from various retailers and are a type of credit card that you can use in that particular store.

Temporary authorisation: A temporary authorisation is a transaction that has been approved but is not yet showing on your account. The value of the transaction will have been deducted from the credit available to you. Usually, a temporary authorisation converts into a ‘posted transaction’ after a few days. However, a temporary authorisation may expire if the merchant does not complete the transaction – for example, in a hotel if you haven’t used the mini bar or charged anything to your room.  

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