CREDIT CARD GLOSSARY OF TERMS
Find all credit card and banking-related terms on this glossary. For further questions about credit cards, you can also refer to HaloMoney’s comprehensive Guide to Credit Cards.
3D Secure / 3Ds
Credit card providers use 3D Secure/ 3Ds as an additional layer of security to protect cardholders from credit card fraud. Merchants using 3D Secure will ask for an online authentication before proceeding to complete your online credit card or debit card transaction.
Air miles are the equivalent of frequent flyer points. However, they are accumulated with credit cards, and can be redeemed for air tickets, airport privileges and other travel-related offers such as accommodation.
American Express is a top payment processing network that issues its own credit cards.
This is the cost charged by credit card providers as part of their maintenance of the credit card accounts.
This is the code issued by the credit card provider telling merchants that your card is valid and you have funds to cover the transaction at the time when authorisation is sought.
Balance transfer is the process when you transfer outstanding credit card balances into one credit account because of the lower interest amount or interest free period for a fixed tenure.
This refers to the feature where you are allowed to withdraw cash from ATMs or over the counter using your credit card. The cash is deducted from your credit limit or funds on deposits, and are subject to a certain limit.
Card not present transaction
This is a type of transaction where the cardholder is not able to physically supply the card with a merchant, usually when it is a purchase over the phone, online or through mail order. The merchant will require a bank authorisation for the transaction to complete.
Card payment network
This refers to providers such as Visa, MasterCard, American Express and Union Pay. These networks helps to facilitate financial partnerships between merchant establishments and credit card issuers. Most of these network providers charge a fee for their services, with the exception of American Express, which issues its own cards.
This is a feature that is available in some credit cards that allows cardholders to get cash rebates.
This is the record of payments you have made and loans you took in the past. Credit card issuers would look at this data as a basis in determining how much of a risk they are taking in lending you money.
Credit limit / credit line
A credit limit is the maximum amount that you can charge on a credit card. If you exceed the credit limit, your card might be declined or you will be charged a penalty. You can also arrange for the bank to increase or decrease your credit limit.
This is an indicator of risk that is based on statistical validation determined by credit card providers and credit bureaus. Your credit score represents your entire credit history in one numeric measure.
These includes any fees you have to pay the credit card provider.
An instalment plan is when banks settle a purchase in full and the cardholder pays the amount to the bank in instalments. This feature is only available on some cards.
This is also known as the grace period, the period of time before the monthly statement due date. During this time, there will be no interest charged on any new purchase. After this period, the cardholder will have to pay interest on any outstanding balance.
When a cardholder doesn’t pay off the full sum on the monthly payment, an interest rate is charged to the outstanding balance. Interest rates differ from card to card.
During the introductory period, banks may apply introductory interest rates to outstanding balances on your credit account.
Late Payment Fee
A late payment fee will be charged to the cardholder if the monthly minimum sum is not paid. It is charged on top of the interest rates on the outstanding balance.
MasterCard is one of the top payment processing networks that does not issue credit cards. It is accepted in many establishments and merchants around the world.
A business establishment where you purchase products or services.
The minimum payment is a portion of the outstanding balance that you are required to pay in a monthly statement. The rest of the amount that isn’t paid will be subject to interest.
This refers to all electronic systems that allow you to do any banking transactions using the internet. You can transfer money, pay bills or just check the balance in your accounts using online banking.
Personal identification number (PIN) is the security code that you need to key in whenever you need to perform any banking transactions. This includes withdrawing money from an ATM. Your PIN should not be shared with anyone.
This is a payment in the form of a discount, reduction, return, or refund for a paid service or merchandise, and is usually given as a reward for credit cardholders for making a transaction with partner merchants.
A rewards program is a feature that many credit cards have. It allows cardholders to accumulate rewards points that can be exchanged for vouchers, cashback or even air miles.
This is a type of credit card that requires the cardholder to make a deposit before being granted a credit line. The credit limit for secured cards are the same or less than the deposit the cardholder puts in. If you always pay your bills on time, you might arrange to apply for a major credit card.
This is the three-digit code which follows right after your card number, usually printed on the signature strip at the back of your card.
Visa is a top payment processing network that is widely accepted around the world.
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