ASDA Credit Card Jargon Buster. Credit card terms explained
Use our Jargon buster to help you apply for a credit card:
APR - Annual Percentage Rate. This is the overall cost of borrowing if you owe money on your credit card.
Activate your card - When you receive your credit card you will normally have to call the card issuer to let them know that you have received your card. They will then make the card live so you can start using it.
Balance - Any money you owe on your card.
Balance transfer - Moving your balance from one card to another card often to take advantage of 0% offers.
Card issuer - The bank, building society or store whose name is specified as the issuer on your card. This may be different to the brand name on your card
Chip and PIN - Your unique four-figure number, which you must use when you spend with your card.
Credit limit - The maximum amount you can spend on your card. If you go over this limit, your card may be refused and you may also have to pay extra charges.
Credit scoring - The system your card issuer uses to decide whether to provide you with a credit card, and to set your credit limit and interest rate. Credit scoring works by awarding points to the information you provide on your application form and to the information recorded on your credit report (held by a credit reference agency).
Direct Debit - Direct debit is a payment system that allows an organisation to instruct their bank to collect varying amounts directly from customers' accounts, using an electronic funds transfer. The amount can vary each month depending on what you have told the organisation it can collect.
Foreign exchange fees - A foreign transaction fee is an administration charge or 'handling fee' that is charged by credit card companies when you use a credit card to buy goods or services in a foreign currency.
Interest - The amount you'll pay on any money you still owe outside of any interest free promotional periods.
Interest-free period - The time between when you buy something on the card and the date when you must pay your monthly bill.
MasterCard - MasterCard cards are issued by most major financial institutions in the UK – (wasn’t strictly true as many use VISA.). Currently, you can use your card in more than 24.6 million locations worldwide.
Minimum payment - The amount specified by your card issuer, that you must pay each month to keep your account in order.
Outstanding balance - Any money you owe on the card.
Points – Many Credit Card providers offer a scheme where Points can be accrued on your account when you make purchases on your credit card. These are converted into benefits, like money off vouchers.
Purchases - Goods bought using your card are called purchases. New customers often are given an interest-free period for card purchases.
Statement - Your monthly credit card bill that shows what you've spent, what you owe, points balance, the minimum you must pay and the latest date you can pay it.
