Glossary

• Annual Fee: A yearly fee that issuers may charge for the privilege of using a credit card.

• Annual Percentage Rate (APR): A measure of the cost of credit, expressed annually as a percentage.

• Available Credit: The unused portion of credit available for the consumer's use.

• Average Daily Balance: Calculated by adding the daily balances over a period of time and dividing by the total number of days in that period, this is the average amount that exists in an account over a period of time.

• Balance: The amount of money owed to the credit grantor, including purchases and any applicable fees, interest or transaction charges.

• Billing Cycle: Generally 28 to 31 days, this is the time between your last bill and your current bill.

• Cash Advance: A cash loan on a credit card. Cash advances are deducted from your total credit line and reduce your total available credit. Note that interest rates for cash advances are generally higher. There may also be a fee associated with cash advances. Refer to your cardholder agreement for details.

• Charge Off: An accounting term to indicate the account is in default.

• Closing Date: The last day that transactions are posted on your account for the specified month.

• Credit: A promise or trust to repay later for goods or services purchased today.

• Credit Counseling: A term referring to the debt management industry. Generally non-profit organizations, they help consumers find a way to pay off debts through budgeting and planning.

• Credit Grantor: Business or person providing goods or services on credit.

• Credit Limit: The maximum amount you may charge on your credit card. Exceeding this amount generally results in fees charged by your credit grantor. Note that cash advances deduct from your total credit limit.

• Credit Report: A file or record which tracks credit history.

• Creditworthiness: The measure of past and future ability and willingness to repay debt.

• Debit Card: When used, the necessary funds are deducted directly from the consumer's personal checking account.

• Due Date: The day your payment is due to the collector.

• Finance Charge: The cost of consumer credit (ie: interest, transaction fees and service fees), given in dollar amount.

• Grace Period: The time allowed to avoid finance charges by paying off the full balance before the due date.

• Interest: Generally a percentage of the amount of money owed, interest is a charge for borrowed money.

• Minimum Payment: While you can choose to pay more, this is the minimum amount due to your creditor each month.

• Past Due: When at least the minimum payment due is not received by the due date, your account is considered late.

• Revolving Account: An account that does not require the entire balance to be paid in full, rather you make minimum payments, generally on a monthly basis.

• Two-Cycle Billing: The Average Daily Balance is calculated by two billing dates instead of one, resulting in higher finance charges.