Business Credit Card Terminology You Should Know About
You are told to read the terms and conditions of your business credit card before you send in your application. There are times though when the application is riddled with terminology that you cannot make sense of the content written within. This glossary that we have put together for you will help you to understand some of the common terms, phrases and acronyms used in the industry.
Account Number - This is the unique number that is assigned to you as the customer by the credit card company. You can locate the account number on the front of the credit card.
Adjusted Balance - The adjusted balance is a balance that reflects payments subtracted that were made on the account and includes any finance charges that is incurred on the account.
Additional Cardholder - With most credit card accounts even small business credit cards it is possible to add extra card holders to the account. The primary owner still remains liable for payments on the account. All purchases are reflected on the account statement.
Annual Fee - The annual or yearly fee is the cost for having the credit card. This is a separate fee from interest charges and is waived by some providers.
Annual Percentage Rate (APR) - When a balance is carried over from month to month a yearly percentage rate is calculated and added to the balance owed.
Authorization - Retailer will sometimes need to seek authorization for some transactions that go above the purchase limit. This is secured either through telephone or electronically. It is used in an effort to minimize fraud. Once the transaction is approved the credit limit is reduced by the authorized amount.
Authorization Amount - Currency amount approved.
Authorization Code - This is a code that is issued to reference the authorization request that may have been approved or denied.
Balance Transfer - This is the process of moving one or several outstanding balances from one or several credit accounts to another credit account. This is usually done to get lower interest rates.
Balance Transfer Fee - This is the cost that is charged by the credit card provider for processing a balance transfer. The fee can range between 1-5% and is waived by many credit card providers.
Billing Cycle - Usually runs from 28-31 days and is the time between billing cycles.
Billing statement - A record of all the transactions for an account that is prepared and mailed by the financial institution once a month.
Card Reader - A device that reads the encoding on the back of plastic credit cards.
Cash Advance - A cash loan that is taken from the credit card using an ATM or bank withdrawal.
Cash Advance Fee - All cash advances incur and extra fee usually 3%. The finance charges on cash advances are calculated at a different rate to other purchases charged to the card. This rate is more than the normal interest rate.
Cash Back Rewards - When credit or debit card holders are given cash back incentives for using their cards this is termed cash back rewards.
Chargeback Period - The issuer can initiate a chargeback as long as it is within a specified number of days from the transaction date. This is known as the chargeback period.
Credit Limit - This is the preset spending limit that is issued by the credit card provided. It is the amount that you are able to charge to the card without attracting fees. It is also referred to as the credit line.
Finance Charge - These are the charges that can be billed to you during your use of the credit card. Some finance charges include balance transfer fees, cash advance fees, late fees, over limit fees, etc..
Fixed Rate (or Fixed APR) - A fixed rate ARP is a interest rate that remains the same throughout the year. It is quite different from variable rates which can change at the will of the credit card provider.
Gas Rebate Credit Card - A reward type credit card that provides savings on gasoline and other gasoline related purchases to cardholders.
Grace Period - The typical grace period falls somewhere between 10-28 days and it is the time that you have to repay your balance without being charged a finance or late fee.
Introductory Rate (or Intro APR) - A lowered annual percentage rate that only lasts for a short period. After this time the introductory rate is changed.
Merchant - An entity through which contracts with the merchant banks originate.
Minimum Payment - This the lowest amount that the credit card provider requires you to pay on the card statement from month to month.
No Annual Fee - A credit card account where the providers waives the annual fee for cardholders.
Online Bill Payment - A secure interface where cardholders can view their transactions and statements online and securely pay their credit card bill over the internet.
Over Limit - An account that has been charged beyond the credit limit of the card. In other words the balance owed to the credit card company is beyond the credit limit.
Over Limit Fee - The over limit fee is the fee that is charged by all credit card companies when cardholders exceed their limit.
PIN (Personal Identification Number) - Similar to a password the PIN is a sequence of digits that is used to identify the holder of the account during a transaction.
Pre-approved - A conditional offer to provide credit to some who has been prequalified based on a abbreviated credit bureau report. A more detailed credit report is required upon which credit would be granted if the applicant qualifies.
Primary Account Number (PAN) - The number that is embossed on the credit card to identify the card issuer and the cardholder account number.
Processing Date - This is the date in which the credit card transaction is processed by the acquiring bank.
Secured Credit Cards - Secured credit cards are usually covered by collateral like a monetary deposit or property. People who have no credit history or those with bad credit can use secured credit cards to establish or reestablish good credit.
Travel Rewards - These are savings incentives issued to cardholders of airline miles credit cards. The cardholders earn travel rewards that they can use for free or discounted tickets.
Variable Interest Rate - Sometimes referred to as a floating rate, the interest on variable interest rate cards adjust up or down based on economic factors.
Account Number - This is the unique number that is assigned to you as the customer by the credit card company. You can locate the account number on the front of the credit card.
Adjusted Balance - The adjusted balance is a balance that reflects payments subtracted that were made on the account and includes any finance charges that is incurred on the account.
Additional Cardholder - With most credit card accounts even small business credit cards it is possible to add extra card holders to the account. The primary owner still remains liable for payments on the account. All purchases are reflected on the account statement.
Annual Fee - The annual or yearly fee is the cost for having the credit card. This is a separate fee from interest charges and is waived by some providers.
Annual Percentage Rate (APR) - When a balance is carried over from month to month a yearly percentage rate is calculated and added to the balance owed.
Authorization - Retailer will sometimes need to seek authorization for some transactions that go above the purchase limit. This is secured either through telephone or electronically. It is used in an effort to minimize fraud. Once the transaction is approved the credit limit is reduced by the authorized amount.
Authorization Amount - Currency amount approved.
Authorization Code - This is a code that is issued to reference the authorization request that may have been approved or denied.
Balance Transfer - This is the process of moving one or several outstanding balances from one or several credit accounts to another credit account. This is usually done to get lower interest rates.
Balance Transfer Fee - This is the cost that is charged by the credit card provider for processing a balance transfer. The fee can range between 1-5% and is waived by many credit card providers.
Billing Cycle - Usually runs from 28-31 days and is the time between billing cycles.
Billing statement - A record of all the transactions for an account that is prepared and mailed by the financial institution once a month.
Card Reader - A device that reads the encoding on the back of plastic credit cards.
Cash Advance - A cash loan that is taken from the credit card using an ATM or bank withdrawal.
Cash Advance Fee - All cash advances incur and extra fee usually 3%. The finance charges on cash advances are calculated at a different rate to other purchases charged to the card. This rate is more than the normal interest rate.
Cash Back Rewards - When credit or debit card holders are given cash back incentives for using their cards this is termed cash back rewards.
Chargeback Period - The issuer can initiate a chargeback as long as it is within a specified number of days from the transaction date. This is known as the chargeback period.
Credit Limit - This is the preset spending limit that is issued by the credit card provided. It is the amount that you are able to charge to the card without attracting fees. It is also referred to as the credit line.
Finance Charge - These are the charges that can be billed to you during your use of the credit card. Some finance charges include balance transfer fees, cash advance fees, late fees, over limit fees, etc..
Fixed Rate (or Fixed APR) - A fixed rate ARP is a interest rate that remains the same throughout the year. It is quite different from variable rates which can change at the will of the credit card provider.
Gas Rebate Credit Card - A reward type credit card that provides savings on gasoline and other gasoline related purchases to cardholders.
Grace Period - The typical grace period falls somewhere between 10-28 days and it is the time that you have to repay your balance without being charged a finance or late fee.
Introductory Rate (or Intro APR) - A lowered annual percentage rate that only lasts for a short period. After this time the introductory rate is changed.
Merchant - An entity through which contracts with the merchant banks originate.
Minimum Payment - This the lowest amount that the credit card provider requires you to pay on the card statement from month to month.
No Annual Fee - A credit card account where the providers waives the annual fee for cardholders.
Online Bill Payment - A secure interface where cardholders can view their transactions and statements online and securely pay their credit card bill over the internet.
Over Limit - An account that has been charged beyond the credit limit of the card. In other words the balance owed to the credit card company is beyond the credit limit.
Over Limit Fee - The over limit fee is the fee that is charged by all credit card companies when cardholders exceed their limit.
PIN (Personal Identification Number) - Similar to a password the PIN is a sequence of digits that is used to identify the holder of the account during a transaction.
Pre-approved - A conditional offer to provide credit to some who has been prequalified based on a abbreviated credit bureau report. A more detailed credit report is required upon which credit would be granted if the applicant qualifies.
Primary Account Number (PAN) - The number that is embossed on the credit card to identify the card issuer and the cardholder account number.
Processing Date - This is the date in which the credit card transaction is processed by the acquiring bank.
Secured Credit Cards - Secured credit cards are usually covered by collateral like a monetary deposit or property. People who have no credit history or those with bad credit can use secured credit cards to establish or reestablish good credit.
Travel Rewards - These are savings incentives issued to cardholders of airline miles credit cards. The cardholders earn travel rewards that they can use for free or discounted tickets.
Variable Interest Rate - Sometimes referred to as a floating rate, the interest on variable interest rate cards adjust up or down based on economic factors.
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