Glossary

Annual fee – once widespread in the 1970s and 1980s, annual fees were paid by credit card holders to their banks for using the credit cards throughout a year. This fee is different from the interest rate charged on the purchases with credit funds.

ATM (Automated Teller Machine) – a terminal that features either a keypad or a touchscreen and allows the users to take the cash out of their bank accounts, check the balance, and make deposits of money by using their credit (debit) cards.

Automatic payment – a procedure that can be set up in the settings of a bank account and that allows regular self-activated payments with specific purposes, such as paying bills or fixed cyclical payments (like mortgage payments and payments for a car credit).

Balance Transfer – allocation of all funds from one bank account or credit card (or a couple of credit cards) to another one.

Bank Identification Number – typically known as the Issuer Identification Number, it can be found on any credit & debit card: the first six digits point to the company that had issued the card.

Billing statement – it is a document, provided by a bank, that contains all the facts about the allocation of funds during a certain period of time, usually during a month. In particular, it lists the following operations: fees, electronic transfers, deposits & withdrawals, checks, deducted or earned interest.

Card Issuer – a company (namely a bank, credit union, financial institution or any other company) which issued and authorized the users to utilize its cards. It is important to note that not just financial companies are able to release cards.

Chargeback – a financial transaction reverted by an issuer via interchange. A transaction return may occur due to breaking the rules and regulations of the association or due to being disputed by the holder of a card.

Chargeback period – a span, when it is possible to initiate the procedure of returning a financial transaction.

Co-signer – an individual who has also signed a credit or debit card, along with another holder of the card, due to the fact that the other person does not meet certain requirements (like age). The co-signer bears a partial responsibility for the account.

Credit card – a means of payment, materialized in a form of a plastic card, which features a magnetic stripe, used for reading the card on the sale points and at ATMs. Credit cards give their holders a possibility to spend more money than they actually have on their accounts, while charging a higher fee and interest rate for it.

Credit history – a span of the financial life of an individual – usually divided by years – that shows how the person paid bills (whether the bills were paid on time and whether all the obligations of the person are satisfied) and how much money the person currently owes. It is usually asked by a bank when a person wants to open a credit line, obtain a credit card, or get a bank credit.

Credit limit – a maximum sum of money that could be withdrawn or spent from one’s bank account.

Credit rating – an evaluation, calculated by rating agencies, of the chances of a person or a company to repay a credit, based on such factors like: how one satisfied one’s obligations, what a credit history one has, the current and future incomes, and so on.

Debit card – a debit card is a plastic means of payment with an encoded magnetic stripe for reading the information on it. Unlike the credit cards, debit cards do not involve credits of funds. On the contrary, the purchases and other payments are made at the expense of an individual’s money that he or she has previously paid in.

Due date – a day until which a person has to pay the bills for the credit card. If the payment had been completed late, the users will have to pay an extra fee.

Expired card – a plastic card with a date of expiration, printed directly on it, which has passed.

Floor limit – an amount of money that an individual is able to spend at specific branches, shops or outlets. The authorization of the individual is required for the further use of the card.

Interest-free period – a period of time during which a person can use credit funds from the credit card without being charged an interest rate. Some financial companies intentionally extend the interest-free period for their new clients.

Joint-account holder – both individuals have access to the banking account and bear an equal responsibility for all the obligations.

Grace period – a span when you can repay the credit funds, which you have spent with the credit card, without actually having charged an interest rate on those funds.

Line of credit – an open loan that allows you to obtain funds over a certain period of time whenever you need and which is accessed by using special checks.

Mobile banking – a service that allows an individual to access his or her account and perform certain actions remotely by using mobile devices and the internet.

Online banking – a service that allows an individual to access his or her account perform certain actions with the help of the PC/laptop and the internet.

Overlimit – going beyond the set credit limit after having completed some transactions.

Password – an order of letters, figures, and other symbols with the help of which you can enter your bank account online. Even though a password should be as secure as possible, experience shows that the majority of users tend to use easy-to-hack passwords.

PIN – also known as Personal Identification Number, PIN is used to verify the personality of the cardholder and can be found on the reverse side of the credit or debit card.

Refund – a sum of money paid back to the cardholder, which usually appears to be a result of a return of a specific product or a way of correcting an error by a bank.

Statement date – a day, usually the last day of the month, when you are going to get a statement for the month that has passed. The transactions, carried out on the next day, will be included in the next statement.