Plain-English definitions for the terms you'll encounter on your financial journey.
A person who is allowed to use another person's credit card account but is not legally responsible for the payments.
Moving debt from one credit card to another, often to take advantage of a lower interest rate.
Credit Card Act of 2009 — A federal law that established fair and transparent practices for credit card companies regarding fees and interest rates.
A service provided by credit card issuers allowing cardholders to withdraw cash up to a certain limit, usually at a high interest rate.
A credit card feature that refunds the cardholder a small percentage of their total spending on purchases.
Debts incurred by individuals for personal, family, or household purposes, such as credit card balances and car loans.
A card issued by a bank that allows the holder to purchase goods or services on credit, with the promise to pay later.
The total amount of money currently owed on a credit card account.
The percentage of a borrower's total available credit that is currently being used, calculated by dividing the balance by the credit limit.
A request by a lender to review your credit report, usually triggered when you apply for a new loan or credit card.
The maximum amount of money a lender allows you to spend on a single credit card or line of credit.
The variety of different types of credit accounts you hold, such as credit cards, retail accounts, and installment loans.
The amount of time you have to pay your credit card bill in full before the company starts charging interest.
A request by a lender to review your credit report as part of the application process for a loan or credit card.
Home Equity Line of Credit is a flexible loan that uses your home as collateral, allowing you to borrow money as needed up to a certain limit and pay it back over time. It functions like a credit card for your house, where your home's value acts as your spending limit.
A revolving line of credit that allows homeowners to borrow against the equity they have built in their property. It functions similarly to a credit card, where the borrower can spend up to a limit and pay it back over time.
A financing method where a business receives upfront cash in exchange for a portion of its future credit card sales.
The total amount of money you still owe on a loan or credit card at any given time.
A fee charged by a credit card issuer when a cardholder's balance exceeds the pre-set credit limit for their account.
A technology that allows users to send money directly from their bank account or credit card to another individual via a mobile app.
A very high interest rate applied to a credit card account if the cardholder violates the terms of the agreement, such as by making a late payment.
The practice of becoming an authorized user on another person's credit card to benefit from their positive credit history.
A type of credit card that requires a cash security deposit, which usually acts as the credit limit.
An individual account on a credit report, such as a credit card, mortgage, or auto loan.