The credit card number is a unique number assigned by the credit card company for the credit card holder that is embossed on the credit card to identify the company and the credit card holder. With a credit card, the account number varies in length depending on the credit card issuer. Visa credit cards, MasterCard credit cards and Discover credit card account numbers are sixteen numbers in length, while American Express account numbers are fifteen numbers in length.
An address verification system is a process of authenticating a new credit card through mail or via phone by using the billing address of the credit card holder in the authorization procedure. This process is used predominantly to reduce credit card fraud. An address verification system may also be used in mail order, telephone credit card order or credit card online transactions by using the credit card holder’s billing address information in the authorization request.
The adjusted credit card balance is the result of calculating the balance by using the process of adding credit card interest charges, credit card fees and purchases to a credit card statement and subtracting any credit card payments or credits. This is a less common method for calculating monthly credit card interest charges since it favors the credit card holder more than the more common bank credit card preferred method of the average daily balance calculation. The balance is determined by subtracting credit card payments or credits received during the current billing period from the credit card balance at the end of the previous billing period. Credit card purchases for the current billing cycle are not put into the calculation. This credit card account holders now has until the end of the billing cycle to pay off the balance and avoid paying interest charges on that amount.
An additional credit card holder is an individual assigned to a credit card account who is also issued their own credit card. For many individuals that obtain a new credit card, it is often convenient and possible to add an additional credit card to the account for use by someone else. The primary credit card holder remains the responsible party for the credit card debt and making the credit card payments on all charges made and is ultimately responsible the full credit card balance, whether the credit card debt was created by the original cardholder or the additional cardholder.
An affinity credit cards are issued by credit card companies that brand or identify the credit card with an institution or organization not operated by the card issuer. The affinity card is offered jointly by the two organizations, the credit card company and the branded institution. The affinity is the relationship the credit card holders may have with the non issuing institution such as a college or non profit organization. The affinity organization receives brand loyalty from the credit card services and often a small percentage or fee from the credit card company. The two organizations generally behind affinity cards are bank credit card issuers and professional associations, special interest groups or other non-bank companies. Affinity cards, or sometimes referred to as co-branded cards, can often be a loyalty credit card where the non-bank partner receives financial benefits from card use by its members or credit card account holder.
Some credit card companies charge a credit card fee for yearly membership or participation. Credit card companies proclaim that these fees help pay for the credit card companies costs of managing the accounts or for some of the credit card services offered on the accounts. These fees generally range anywhere from $25 to $75, but can be much higher depending on the credit card company. Bank credit cards with no annual fees are becoming much more common. Credit card annual fees are usually seen on cards that provide uncommon or exceptional services such as charge cards that require the credit card balances to be paid in full each month or card with particularly high credit card limits or even on some bad credit cards designed for consumers with a poor credit history.
The credit card annual percentage rate or credit card APR is the credit card interest rate charged and expressed as an annual mount. The APR is essentially a measure of the cost of credit and reflects the total yearly cost of the interest, expressed as a percentage rate. The credit card rate may be subject to change, based on the terms of the card and whether the credit card rate is fixed or variable. In addition, different transaction types may be charged different APRs, such as for credit card cash advances or credit card balance transfers which may be charged a higher credit card interest rate or lower depending the credit card offer and the terms set by the particular bank credit card.
A credit card application is the document consumers’ fills out and sign to apply for a credit card in order for a credit card company to process and approve a new 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, determine the credit card limit and establish the credit card interest rate. The parties that fill out and sign the credit card application will be the responsible parties for the credit card debt and credit card payment. The application can be filled out and signed as a joint account or as an individual.
A credit card application fee is a credit card fee charged by some credit card companies that must be paid by the individual filling out a credit card application before the credit card company will review or process the new credit card. Credit card application fees are not very uncommon but may apply for credit cards designed for people with bad or no credit, such as secured credit cards, prepaid credit cards and bad credit cards.
Authentication in credit card processing, is the process of establishing or confirming that data has come from its original source and is genuine. This involves the credit card merchant verifying the data received and data sent is provided to appropriate parties. The process of assures that a credit card transaction has been initiated by an authorized user of the credit card. Authentication is used to combat credit card fraud in credit card transactions. Credit card authentication has been expanded by credit card companies by including security codes on credit cards. Authentication is not the same as authorization.
Credit card authorization is a procedure in credit card processing used to assure that a credit card holder has adequate funds available within the credit card limit for a transaction. This procedure is important for the credit card merchant as well as the credit card holders. Authorization is the first step in processing a credit card transaction request. Authorization keeps the transaction within the credit card limit of any particular card and is used to control credit card fraud. With appropriate authorization for a credit card transaction, the correct funds will be set aside for the transaction with the merchant and the credit card balance of the account holder will increase as well as producing a reduction in the available credit by the authorized amount.
The authorization amount is the dollar amount approved by the credit card company to be charged for a specific credit card transaction. The authorization is usually an amount equal to the amount of the credit card purchase made by the card holder. However, with transactions that may require authorization before a purchase is initiated, such as paying for gas at the pump, an authorization amount greater than the expected purchase is processed by the credit card merchant and credit card issuer. After transactions are approved, the authorized amount is deducted from the amount of available credit from the credit card account holder’s credit card limit.
The credit card authorization date is the date and time that a transaction was authorized. In a credit card transaction, the authorization date is the date that the credit card merchant receives authorization from the bank credit card completing the credit card processing on a specific transaction. With debit card transactions, the authorization date may not always be the same as the date funds are withdrawn from a bank account.
A credit card authorization only transaction is a transaction initiated by a credit card merchant that sets aside a reserve amount of funds against the credit card limit for a future transaction. The credit card purchase may take place within moments or not take place for some days. Authorization only transactions are generally used by merchants that require authorization in advance before a purchase may be completed, such as renting a car or a paying for gas.
An individual who has been granted permission to use a credit card account. An authorized user is any person who has permission to use a credit card account, but is not responsible for paying the bill. An authorized credit card user is measurably different from a credit card holder on a joint credit card account, in which both parties are responsible for the credit card payments and credit card debt. In some cases, an authorized credit card user will receive a credit card in his or her name, even though it is linked to another parties credit card account and they are not obligated with the credit card company to make the credit card payments.
Credit card automatic payments are credit card payment that are established and authorized as regular withdrawals to be made from a checking or other deposit account to pay the credit card amount due. This is a method of making regular predetermined payments on the credit card accounts by transferring funds from the checking or savings account. The amount can be for the minimum credit card payment up to the full credit card balance.
The available credit on a credit card is the amount of funds or credit available for use. The amount is determined by subtracting the outstanding credit card balance from the total available credit or credit card limit. The available credit is essentially the amount of credit you have left to use on your credit card account for future transactions.
The average daily balance is a common way for credit card companies to calculate credit card interest charges for the billing cycle. This is a measure of the average balance for each day in the billing cycle. The most common calculation for the average daily balance is to simply all of the daily balances and divides that sum by the number of days in the billing cycle. The calculation includes new purchases and credit card payments and credits your account from the day payment is received by the credit card company. Depending on the basics of an individual credit card agreement, new purchases may or may not be added to the credit card balance, credit card cash advances are usually included. The average daily balance is then multiplied by the card’s monthly periodic credit card rate to calculate the finance charge for the month. The average daily balance is the most common method used by bank credit cards to calculate the credit card payment due.
Bad credit is a term used to describe an individual with a poor credit rating or a low credit score or in general less than perfect credit. Common practices that can bring about a bad credit rating include making late credit card payments, skipping payments, exceeding credit card limits or declaring bankruptcy. Bad credit can result in an individual being denied future credit or access to a new credit card. Bad credit cards, secured credit cards and prepaid credit cards are types of credit card offered to assist consumers in obtaining a credit card if they have bad credit.
Bad credit cards are credit cards offered for individuals that have damaged or poor credit. This is an informal term use to describe types of credit cards that easier to obtain than standard credit cards. Bad credit cards include secured credit cards, prepaid credit cards and other credit card offers that require less stringent credit standards. These credit cards can help consumers rebuild their credit by offering credit that the account holder can then use to make timely credit card payments, access credit for needed transactions and can benefit those borrowers with no credit history as well. Most unsecured credit cards and secured bad credit card companies report to credit bureaus, thus enabling borrowers to re-establish a good credit profile and credit score. Many bad credit card offers will have a higher credit card interest rates and potentially higher credit card fees.
When referring to credit or loans, a balance refers to the amount owed by a debtor on a specific credit account. The credit card balance is the outstanding amount of money owed on a credit card account. The credit card balance includes any prior credit card debt carried into a new billing cycle plus new credit card transactions including credit card interest and credit card fees less any credit card payments made. In banking, the balance may refer to the amount of money in a particular account.
Credit card balance transfers are a credit card service established to move an unpaid balance from one open credit card account to another credit card account. Special credit card fees or a different credit card APR may apply to this type of transaction. A consumer that has a credit card balance that they don’t expect to pay off in a month may want to use another credit card with a lower interest rate and transfer the balance to the lower credit card rate to save credit card interest charges.
The credit card balance transfer fee is a fee usually charged by credit card companies for transferring credit card balances from one credit card to another. The balance transfer fee is a one-time fee charged for balance transfer services. However, many credit cards offer special balance transfer promotions with no fees and special low credit card rates for a bank credit card balance transfer. Some credit card companies do not have a fee and for those that do, the amount of the credit card fee will vary.
The balance transfer APR is the annual percentage rate of interest charged on a balance transfer transaction by a credit card company. Many credit card companies charge a separate credit card interest rate on balance transfer transactions. The credit card balance transfer APR is generally slightly higher than the APR for purchase transactions, but many new credit cards offer special balance transfer credit card rates to encourage cardholders to transfer balances from other cards. Special rates usually apply for a specified period of time and apply only to balances transferred during the promotion.
A credit card or debit card issued by a bank. The term bank credit card is often used to describe all credit cards that are not issued by retail stores or other merchant. The bank credit card may also be a debit card, where money is paid in before a transaction can take place, or it may be a credit card. Bank credit cards are most frequently associated with the networks of Visa credit cards and MasterCard credit cards.
The billing cycle is the length of time between billing statements on a credit card. Generally, the billing cycle is one month in length but the number of days within a specific billing cycle may vary with credit card companies. It is the total number of days between the last due date and the current due date on a credit card statement.
The credit card billing statement is a monthly bill or the record prepared by the credit card companies listing all the transactions during a billing cycle. The statement shows a list of transactions carried out by credit card account holder in a particular billing cycle. The statement includes the previous cycle credit card balance, new credits or credit card payments, new credit card interest charges, new credit card fees and the ending balance. The billing statement is usually sent via mail but is more frequently being communicated electronically through the bank credit card website.
Business credit cards are utilized by corporate executives as well as small business owners in order to separate keep business expenses from personal charges. Credit card companies market to small business to supplement the consumer card market. A business credit card has many of the same features as traditional credit cards, including low introductory credit card rates, credit card cash back, credit card rewards and rebates. Business credit card interest rates and credit card fees will depend on the credit card company and on an applicant’s credit and can change at any time.
The credit card member is the individual to whom the credit card number is issued or the authorized users of that credit card. Card member is used to refer to that credit card holder as either a member of the network branded on the card such as Visa credit card or MasterCard credit card or may refer to the bank credit card such as Chase or Citi or other credit card company that issued the card.
The credit card reader is a device capable of reading the encoding embedded in credit cards in order to record a transaction by a credit card merchant. The card reader transmits the credit card online and eliminates the need for the merchant to manually enter the credit card number and other cardholder information during the point of sale. The credit card reader is sometimes referred to as a credit card terminal.
The credit card cardholder agreement details the terms and conditions of the credit card account and includes information such as the credit card rate, credit card fees and other credit card services and costs associated with the account. The agreement is required by Federal Reserve Board regulations and must include the credit card annual percentage rate, monthly minimum credit card payment formula, annual credit card fees and the cardholder’s rights in billing disputes. Changes can be made to the cardholder agreement, but the cardholder must be notified in advance.
Credit cards companies offer cash advances as a credit card service to account holders. The credit card cash advance feature will have a separate credit card limit for cash advances. The cash advance can be accessed by using the card at a bank or an ATM or with checks provided by the bank credit card. A credit card fee is normally incurred when obtaining cash advances. In addition, the credit card interest rate is usually higher than on purchases and typically there is no grace period.
The credit card cash advance fee is a fee charged by a credit card company whenever a cardholder borrows cash using the credit card. Cash advances are one of many credit card services that credit card companies often promote so that card holders can get access to cash up to a certain limit. The cash advance option generally comes with a separate credit card fee. The fee can be a per-transaction fee or a percentage of the cash advance. Depending on the bank credit card, the cash advance fee may be deducted directly from the cash advance at the time the money is received or it may be posted to your bill as of the day you received the advance.
The credit card cash advance APR is the credit card interest rate charged just for cash advances on a credit card account. This cash advance credit card service usually has a much higher credit card interest rate than for purchases and credit card balance transfers. The higher credit card rate is generally because the credit card companies attribute a higher risk for this type of credit card use. There is usually no grace period for cash advances, credit card cash advances will incur interest charges as soon as the transaction is posted. The credit card agreement will disclose the cash advance APR on a new credit card.
Cash back is one of many credit card reward features that come with some credit card offers to encourage credit card use or to invite consumers to apply for a credit card. This credit card reward program credits the card holder a certain percentage of purchases during a period of time. This credit card service allows the credit card account holder to earn cash credit card rewards with each purchase. These types of cards can be the best credit card type for those that pay off their credit card debts monthly and use one credit card for monthly expenses in order to maximize the reward and avoid excessive credit card interest charges.
A charge back is a previously authorized transaction on a credit card that is returned to the credit card merchants account and credited back to the card holder’s credit card balance. A charge back is the reversal of a credit card transaction due to the cardholder disputing the validity of the transaction or because of dissatisfaction with the product or service received from the merchant. Typical credit card services disputes involve product delivery problems or product or service dissatisfaction. A charge back can also occur because of a failure by the credit card merchant to follow the rules established by the credit card company for credit card processing. Credit card holders are usually instructed to try to obtain a resolution from the merchant before disputing the bill with the credit card company.
The charge back period is the time period, usually stated in number of days, from the credit card processing date during which the credit card company and credit card account holder may initiate a charge back or reversal of a credit card transaction. The charge back period may vary between credit card companies, but the general industry standard is between 30-60 days. Credit card holders need to review each credit card billing statement to be sure and dispute any incorrect charges on their account within the designated charge back period. The credit card agreement and / or the credit card application will have the terms regarding charge backs and the charge back time frame.
A charge card is a type of payment card in which the charges to the credit card account must be paid in full each month when the statement is issued. The term charge card is generally reserved for credit cards that do not operate as a standard revolving line of credit but requires the payment be paid in full by the statement due date each billing cycle. It is similar to a credit card, except that the contract with the credit card company requires that the cardholder must pay charges made in full, there are no monthly credit card payments or a credit card balance that is carried over. Typically charge cards do not charge credit card interest charges, but late fees can apply if full payment is not received by the due date. A credit card is technically a revolving credit line which does not need to be paid off in full, no late fee is charged as long as the minimum credit card payment is made, which can carry a balance forward as a loan charging interest. Often, the two types of payment cards are referred to without a distinction made them and the two terms are used interchangeably to describe any card which can be used as payment.
A charge off is a term by creditors and credit card companies referring to a debt that they do not expect to be paid in a reasonable time and are classifying it as an uncollected debt for their records. This does not mean that the debt or credit card balance for credit card holders no longer exists, that the credit card holder is not responsible for the credit card balance or that there will not be further attempts to collect the credit card debt. The term is simply a classification once the credit card payments or debt payments have reached a point in which the credit account is considered no longer active.
A firm assigned by a creditor, such as credit card companies, to collect overdue debts. Some creditors and bank credit cards have internal collection departments others will use and outside service. Similar to the original creditors, collection agencies often report account information to consumer reporting agencies.
A co-signer is a person who signs a credit agreement or promissory note that is also signed by one or more other parties. All parties are taking responsibility for the debt. A co-signer for a credit card is an individual who signs the credit card application and agreement with another borrower and promises to honor the agreement for timely credit card payments and should the principal borrower default, be responsible for the repayment of the total credit card debt.
Consumer credit counseling is a service that provides counseling to individuals on how to work out a realistic budget and debt repayment plan to work with creditors. The goal is produce a manageable budget and repayment plan to ensure that debts are paid back over time. Consumer credit counseling services are usually non-profit organizations. When working with credit card companies, consumer credit counseling services may request a longer pay off period from the bank credit cards or a reduction in the credit card interest rates to reduce the overall credit card payments. Often the terms are not agreement with the original credit card application and though the credit card debt will be reduced faster the individual’s credit rating may be harmed.
The Consumer Credit Protection Act, passed in 1968, established basic consumer protections, including Truth in Lending disclosures. It requires creditors, including credit card companies, to state the cost of borrowing in understandable terms to allow consumers to determine how much credit will cost, and to compare credit card offers and most credit offers.
Credit is the lending of money. Money that a lender, such as a bank credit card, gives to a borrower on condition of repayment with a certain interest rate over a period of time. The parties involved in a credit transaction are the creditor, which would be the credit card companies, and the debtor, which would be the credit card holder or the party receiving the funds with a promise to repay at a later time. Credit is essentially any form of deferred payment, including deferred payment of debts. Credit cards in where the borrower pays the credit card balance in full without incurring credit card interest charges would still involve the use of credit.
A credit card is a type of payment card used by consumers to make use of credit in financial transactions. Credit cards offer revolving lines of credit to the credit card holder, which allows the credit card holder the ability to pay the credit card balances over time or pay the monthly credit card debt at once. When a new credit card is used to make purchases, the cardholder is accessing an established credit line with a preset credit card limit to pay for the goods or services purchased. Approved credit card merchants accept the credit card as a form of payment and credit card companies approve credit and issue the cards to consumers who apply for credit cards and meet the card company’s standards. The amount of credit and the credit card interest rate on the credit card is generally determined by the borrower’s income and credit history. Credit cards are issued by banks, credit unions and some stores such as department stores and gasoline companies.
Credit card consolidation involves combining more than one high credit card balances into one single credit card with a lower credit card interest rate and/or a reduced monthly credit card payments. Credit card consolidation most frequently takes place with credit card balance transfers from one credit card sometimes using 0% interest credit cards. Credit card consolidations may also be achieved with a home equity loan or line of credit or even a low interest rate personal loan.
Financial institutions that provide a line of credit to the consumer through a credit card also called credit card companies. The credit card issuer or credit card company may include banks, credit unions or savings and loan associations as well as stores such as department stores or gasoline companies. The card issuer assumes primary responsibility for the cardholder’s ability to repay the credit card balance on the credit card account. MasterCard credit cards and Visa credit cards are not a credit company. When the credit cards have these credit card services, the issuing bank credit card company that issues the new credit card to the cardholder is the issuer and will be a licensed member of Visa and MasterCard.
A credit card number is a unique number assigned to a credit card account. The unique number is assigned by the credit card company to each new credit card. The first six digits on a credit card are called the issuer identification number. The first credit card numbers identify the issuer such as, Discover, Visa credit card, MasterCard credit card or American Express, for example. The remaining digits of the credit card number identifies the cardholder or account owner and is unique to each credit line account established with a credit card company.
A company that performs the authorizations and settlements on credit card activities, usually handling several types of credit cards and payment cards. Merchants who accept credit cards as a form of payment utilize the credit card services of credit card processors who handle the transactions electronically. For credit card merchants that wish to sell their products to bank credit card holders, they will retain the services of one or more of these processors who handle the credit card processing for the credit cards that the particular merchant wants to accept as payment.
A process of suspending or preventing a credit reporting company from releasing your credit report without your consent. All credit inquiries including those to approve new credit or new credit cards or credit card applications will also be hindered because special approval is needed to access the credit report of the individual who has requested a credit freeze. The credit freeze can be used to avoid questionable activity, as a form of voluntary restraint from use, or to help stop credit card fraud due to theft or missing credit card numbers.