9 Credit Card Terms You Should Know

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An issued card from a financial institution that allows a person to borrow money in the form of credit.

A secured card is probably one of the easiest cards to get when you first start building your credit. This is where you pay a cash deposit, and in turn, you get a credit card with that amount of deposit on it. For example, if you get a secured card and pay a deposit of $200, you will then in turn get a credit card for $200.

Otherwise known as the annual percentage rate, APR is the yearly/monthly interest rate. The APR is usually listed at the top of every credit agreement and varies from 10% to 25% or more. Credit card companies may charge you interest if you carry a balance. For example: Some cards won’t begin charging you interest until a year after having the account, and some may charge you within a month.

This is the lowest amount you can pay monthly. Every card varies and can have a minimum payment of $25 or more. Some cards don’t have a minimum payment and require you to pay the full balance monthly. You should always pay more than the minimum payment.

The time you have to pay off your credit card before it starts to accrue interest..

This is the maximum amount of money you are allowed to spend on your card. Your yearly income as well as your credit score are key factors in determining what your credit limit will be.

A fee that your credit card company charges you for simply having a card. It’s always best to get a card without an annual fee. This annual fee will be deducted directly from your credit limit. Some annual fees are charged as soon as you open your card, some are charged at the end of the year, and some cards may charge a certain amount when you open your card and then a certain amount after a year.

This deals with transferring credit from one card to another.

A person that receives a copy of your credit card as well. The card will be connected to the same account, but the primary cardholder is responsible for paying off the card. Having an authorized user is helpful when building your credit.