Our credit card jargon buster

There’s lots to think about when you apply for a new credit card and if it’s your first card, you might get a bit muddled up by all the terms, jargon and features.

That’s why our jargon buster is here to make everything a little easier. We’ve also put together a guide to finding the right credit card for you, if you’re not sure where to start.

Here are our essential credit card terms A-Z:

The main credit card holder can ask for an extra card so that a second person can use their account.

Someone with a low credit score or bad debt in their past might be seen as having adverse credit.

If you’ve got more than one reason to get a credit card, but don’t want to apply for multiple cards – then an all round credit card could be a great option. They’re handy for spreading the cost of a big purchase, transferring balances or if you need to pay cash for something unexpected.

This is an amount of money credit card companies may ask you to pay in return for a range of benefits and rewards.

This is the rate of interest that will be charged over 12 months.

For example, if you borrow £100 at an APR of 9.9%, the amount you would owe after 12 months would be £109.90.

Having a low credit score or bad credit history could make it harder to get a credit card, but Foundation and starter cards could help people build or improve their credit rating.

When you move the amount you owe from one card to another, it’s called a balance transfer.

These cards are designed for transferring existing credit card balances and could help you save money if your card has a 0% interest period. When looking for a balance transfer card, you should think about the length of any 0% interest period, transfer fees and if you want to use the card for purchases.

When you use your credit card to take out cash at a bank or cash machine.

Stands for the Consumer Credit Act 1974 - legislation for protecting customers who are borrowing money.

Sometimes known as a Foundation card, this is usually aimed at people with a poor or limited credit history (bad credit) to give them the opportunity to help build or repair their credit rating.

An additional charge that's added to some transactions, like cash advances or using your card abroad.

Interest is the amount you pay for borrowing money on a credit card. This amount will vary depending on the type of card you choose, your credit history and the amount of debt you have.

Your credit history is a record of how you handle debt, it includes everything from current loans, mortgages and hire purchases, to whether or not you have defaulted on any monthly payments.

Your credit limit is the maximum amount you can borrow on your credit card. It’s set by your bank and is based on things like your income and credit score. Want to know more? Our guide to credit limits could help.

Contactless payment credit cards let you make purchases of £100 or less by simply touching the card to the reader.

This rating is worked out using your credit history and helps providers decide whether to give you a credit card or not. For more information, have a peek at our guide to credit ratings.

When your provider is trying to decide what rates to give you or if they'll offer you a credit card, they’ll check your credit history with top reference agencies.

Your credit report lets providers know how responsible you are at making repayments on purchases, credit or other debts. You can see your own report by getting in touch with one of the top three credit reference agencies - Experian, Equifax or TransUnion.

If you do not make at least your minimum monthly repayment, your credit card account may go into arrears. If your account is in arrears for a number of months, your credit card company may default your account.

This means that you will be asked to pay back your entire balance and it will be reported on your credit report. You may find it difficult to be approved for other financial products for a number of years following this.

Don’t forget this one – it is the date each month that you need to make at least your minimum repayment by.

A credit card eligibility checker is a quick and easy way to find out how likely you are to be approved for a card without affecting your credit score.

There are a number of different things your provider will consider when deciding if they'll give you a credit card. These may include things like your salary, age and credit history.

When you use your credit card abroad, your provider might charge a commission on exchanging purchases back into sterling.

This is a handling charge for purchases you make abroad.

Going on holiday? Our guide to using your credit card abroad might be handy.

Card companies sometimes add a handling fee to your balance for certain things, like using your card abroad, using a credit card cheque or drawing cash from your card.

Going on holiday? Our guide to using your credit card abroad might be handy.

When you make a purchase on your credit card, your provider will charge you interest if you don’t pay back your balance in full each month. How much they charge will depend on your card, your APR and your agreement with them.

When you spend money on your credit card, there’s normally a little while before you start incurring interest and these are sometimes called interest-free days.

When you’re applying for a new credit card, you might be offered an introductory rate of interest. This is normally lower than the standard rate offered by providers and only lasts for a set amount of time.

A low APR credit card offers a low APR on purchases, which can be good if you’re hoping to pay back debt over a longer period of time.

These cards give you the chance to collect rewards like air miles, cashback or points while you spend.

This is the lowest amount that you can pay back on your credit card debt each month.

This is when you move money from a credit card into a current account. There’s usually a fee involved when you do a money transfer.

If your issuer makes any changes to the terms and conditions of your credit card, you will be sent a NOV that shows you what’s going to be changed.

This is the amount you currently owe on your credit card.

A purchase credit card may offer 0% interest periods on purchases for a set period of time.

This is the interest rate, plus any fees that most people who are accepted for a credit card will pay over the course of a year.

This is a transaction you’ve made that hasn’t gone through yet, either because it will take a few days or because it’s something like a hotel deposit that will be released at the end of your stay.

Any time you make a payment on your credit card it's called a transaction.

When you move the amount you owe from one credit card to another, you might have to pay a balance transfer fee, unless you have a 0% balance transfer fee card. There’s also usually a fee involved when you do a money transfer.

On a variable rate card, the annual percentage rate (APR) might change based on what’s happening in the market.

If you feel like you need more information be sure to seek advice before you apply for a credit card, so you know what you are signing up for.

You might want to compare our credit cards to find out more about the different features on offer.