Glossary of terms

With so many types of credit cards out there, it can be difficult to choose the right one. Here are a few common terms you may come across when looking for a credit card.

0% purchase card

These cards won't charge interest on any purchases you make for a specified time period (usually between three months and a year). However, you may still be charged for things like balance transfers and cash advances.

Acceptance criteria

Every credit card company has its own acceptance criteria that you must meet to qualify for one of its cards. For example, you may have to earn over a certain amount, or they may expect you to have a good credit rating.

Additional card holder

Anyone who shares your credit card account with you (e.g. your partner). Some credit card companies offer added benefits for credit cards with more than one holder.

Annual fee

Some credit cards may charge an annual fee for the service. You may be happy to pay this if your card offers a lot of benefits - but if you're not likely to take advantage of these you may want to look for a card without an annual fee.


Annual Percentage Rate - the interest rate you'll pay on your credit card over the course of a year. This is calculated taking into account any other fees. Generally, the lower the APR the less interest you will pay.


Automated Teller Machine - another name for a cash machine. Most credit cards can be used to withdraw cash, just like a debit card - although there may be associated fees for doing so.


How much you owe on your card at any given time. Any interest you are charged will be based on your balance.

Balance transfer

A balance transfer involves moving debts from other cards onto your new card. Some credit card providers offer 0% balance transfer periods, which means you won't be charged any interest on the transferred balance for a set time. This gives you a great opportunity to repay more of your debt without it growing by the addition of interest.

However, most providers will charge a fee for this - usually a small percentage of the balance you're moving across.

Cash advance

A cash withdrawal made using your credit card, usually from an ATM. You'll repay this in the same way as you would pay back any other spending on your card. Additional fees and interest is usually payable.


Some cards offer cashback on purchases you make using your card. This builds up after each purchase and can then be credited to your account.

Credit card

A card that allows you to spend money in advance and pay it back later. Credit cards are accepted by most retailers, restaurants and other businesses across the UK, and many more across the globe.

Credit history

A record of your borrowing over the last six years. Your credit history will also show any late payments, defaults and any other issues you've had with repaying your debts. Credit card companies will look at this before deciding whether to accept your application and which credit card and interest rate to offer you.

Credit limit

The total amount you are allowed to borrow on your credit card.

Credit profile

A document which provides information on your credit history. You can use this to spot areas for improvement in your credit activity.

You may even be able to find errors in your credit history, which could be holding you back. Having these errors amended could improve your chances of being accepted for a credit card.


The ongoing charge on your credit card balance. Because it's charged as a percentage of the balance, the interest you pay will vary depending on how much you owe.

However, you'll only be charged interest on the balance you don't pay back before a certain date (usually a couple of weeks after your monthly statement is issued), so if you pay everything back on time you may never pay any interest.

Interest rate

The percentage rate at which interest is charged. This is usually quoted as an APR, which is what you'll pay in interest over the course of a year.


The bank, building society or other financial institution that provides your credit card. Also known as a creditor.


A widely-used type of credit card that is accepted in most countries across the globe.


A retailer or other company which accepts payments by credit card.

Minimum payment

The minimum amount you'll be required to pay back on your credit card balance each month. This will usually be set out on your credit card statement.

Remember that you'll only be charged interest on any balance you don't pay back by the end of the repayment period.

PIN number

PIN stands for Personal Identification Number. This is a four digit number exclusive to your credit card which must be entered when using your credit card to withdraw cash or pay for goods.

Payment protection insurance (PPI)

A type of insurance that covers your credit card repayments if you become unemployed or if your income falls.


A widely-used type of credit card that is accepted in most countries across the globe.

Debt Solutions subject to conditions and acceptance. Credit rating may be affected. Fees payable if continuing services provided. Repaying debt over longer may increase the total amount to be repaid. Calls may be recorded for training and quality purposes. Calls to 0800 numbers from BT landlines are usually free, calls from other networks may vary and you should check with your network provider for full details of your service.

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