Glossary of Credit Card Terms Adjusted balance method – Balance is determined after ____________________ any payments or credits that occurred during the _____________________ period. Least expensive manner of determining the finance charge and most ________________________ to the consumer. Annual fees – Yearly charge for use and ______________________ of credit cards. Can range from $15 to $75 or more per card. Some cards have ________ annual fees. Annual Percentage Rate (APR) – Percentage _______________________ rate charged on money borrowed or ____________________________ balances. All credit issuers _________________ disclose the interest rate as an annual percentage rate. Average daily balance method – The _______________________ balance each day of the month is _________________ together and the sum divided by the number of __________ in the month to determine the average daily balance. Most common method of calculating the balance. Cash advance – A quick, convenient and usually _____________________________ method of obtaining a _______________ through a credit card. The loan may be obtained by writing a check _______________________ by the credit-card issuer or by using an automated teller machine (ATM). Collision Damage Waiver (CDW) – Rental car collision insurance which ___________________ the credit card holder for any collision damage to a rental car which is __________ covered by the customer’s _____________ automobile insurance. Some credit cards now offer this feature free as an added _______________________ to choose their card. If this insurance is purchased through a car rental agency, it may cost $10 a day or more. Extended warranty – A feature offered by some credit cards which extends (usually doubles) a ___________________________________ warranty on purchases made with that credit card. Finance charge – The amount of ____________________ you must pay on outstanding credit card balances (cost of credit). Grace period – Time period between the ____________ of the billing cycle and the date you must pay bill in ____________ to avoid a finance charge – usually 25 days. If there is no grace period, the customer may have to pay finance charges from the date of __________________ or date ______________________ to account. Late Fee – A __________________ assessed on amount past due. Can be a percentage (i.e. 5 %) or a combination of a flat fee plus a percentage (i.e. $20 plus 5 %).