Commonly used credit cared terms

1. Finance Literacy:Commonly Used Credit Card Terms

3. Credit Card Terms Annual Fee: Fee charged by the credit card company to the credit card hold once a year. Some credit card companies do not charge annual fees. Balance: This is what is owed on the credit card 3

4. Credit Card Terms Annual Percentage Rate (APR): It's the cost of borrowing calculated per year. Example: 3% interest is charged monthly Therefore: 3% x 12 months = 36% annually 4

5. Credit Card Terms Cont.... Cash Advance: Withdrawing cash against the line of credit on your card. Always has a higher interest rate and no grace period. Finance Charge: Is a fee for the use of credit. It's usually a percentage of the borrowed amount. This is how the lender makes a profit. 5

6. Credit Card Terms Cont.... Grace Period: Is the time between a charge is made and the finance charge is added to the balance. Usually 20-25 days. Line of Credit:  Is the credit amount available to you on the card.  6

7. Credit Card Terms Cont.... Transaction Fee: Fees incurred for certain transactions 1. cash advance 2. over-limit charges 3. late payment 7

8. Credit Card Terms Cont.... Arbitration: This is where parties agree to resolve any disputes outside of court. This is a settlement method where all parties involved are bound by the decision of the arbitrator. 8