Do you own credit card? Do you really know about the credit card terms ?
10 Credit Card Terms
1. Minimum Payment
The minimum payment is essentially the lowest amount of money you can put toward your bill each month without being considered delinquent. Minimum payments will vary from card to card, but are generally between 2% and 5% of the balance, unless the balance is less than a certain amount (typically around $25).
2. Late Payment Fee
If you fail to make a minimum payment by the due date specified on your monthly billing statement, you will more often than not incur a late payment fee. These too will vary from card to card, but are typically around $25 to $35.
An APR, which stands for annual percentage rate, is essentially the interest rate associated with the card for the entire year. Your purchase APR is applied to whatever balance you have left on the card following your monthly payment, but other APRs may be applied to cash advances or balance transfers (we’ll explain those later), depending on the terms and conditions specified in your application. When shopping around for credit cards, it’s important to take note of whether your card carries fixed or variable APRs. Variable-rate cards change based off of the interest rate the government charges to banks, while fixed-rate cards do not. Under the CARD Act, issuers have to give a 45-day notice for rate increases unless the cardholder specifically has a variable-rate card.
4. Penalty APR
It’s also important to note what a card’s penalty APR is before filling out an application. Penalty APRs are essentially higher interest rates that can be triggered by an infraction from a cardholder. Currently, the only trigger that can affect existing transactions is being 60 days delinquent on payment, but other triggers, such as making one late payment or going over a credit limit, could cause a penalty APR to be applied to new purchases, depending on the terms of your credit card agreement.
5. Grace Period
The grace period refers to the amount of time an issuer gives you to pay off a balance before incurring interest on it. This period typically ranges from 21 to 25 days. Keep in mind that the grace period applies to new purchases, rather than to the balance you’re revolving month to month. That is certainly incurring interest, unless you were lucky enough to score a 0% introductory APR.
6. Balance Transfer
Introductory APRs are typically offered on balance transfer cards. A balance transfer allows consumers to move high-interest debt they carry on existing credit cards to a new card that charges little to no interest, at least for an introductory period. Most balance transfer cards offer introductory rates for 12 to 18 months, but there is a typically a fee of 3% to 5% of the debt you are moving over incurred when you take an issuer up on this offer.
7. Cash Advance
This is essentially a cash loan you obtain with your credit card. According to the Consumer Financial Protection Bureau’s definition of popular credit card terms, cash advances can occur when you use a credit card to obtain cash from an ATM, make a wire transfer, buy foreign currency, travelers’ checks, money orders, lottery tickets or gambling chips, or cash an access check.
What’s important to note about cash advances is that they are generally pretty expensive. Issuers will charge a fee for obtaining a cash advance (typically around 3% of the total amount) and the APR on it will be significantly higher than the card’s APR on standard purchases. The average is around 22% to 25%.
8. Authorized User
An authorized user is a person who has access to the credit card account (using via a card in their name), but is not actually responsible for paying the bill. For instance, it is very common for a parent to make a minor child an authorized user on an existing credit card account. While this can help the new credit cardholder learn about spending responsibly, it won’t actually help build credit as the bills don’t truly belong to the child.
A charge-off is what happens when an issuer sells a balance that has gone a significant amount of time without being paid to a collections agency or another third-party debt collector. Again, it will vary from card to card when this sale actually occurs. It’s important to note (or ask) when your issuer would do this, since having a debt go into collections could have a significant impact on your credit score.
10. Annual Fee
This fee, which can be anywhere from $10 to $2,500, is charged each year for simply having the card in your wallet. They are particularly prevalent among high-end rewards cards since issuers need a way to fund their points or cash-back programs, but also pop up on cards geared toward people with mediocre credit as they pose more of a lending risk. It’s important to note that those with excellent credit scores can find some really great rewards cards that don’t carry any annual fee.
Source :- MainStreet
Okay.. Some of term is same like other’s country. Maybe the fee is different based on your country.