glossary_of_credit_card_terms

					                       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 %).

				
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