Credit Card Terms Glossary - Understand & Know all Credit Terms
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22 MAY, 2020
Cashless payment transactions have become extremely popular today in most economies. While there are numerous modes available for cashless transactions, credit cards have become a popular choice. Many of us today prefer using this plastic card to make purchases as it carries innumerable perks. From cashbacks to discounts, credit card issuers offer some very good perks. However, to improve your credit card usage, it is important to stay abreast of its associated financial vocabulary.
Credit Card Terms To Build Healthy Credit
Revolving credit
Revolving credit may sound like a very complex term. However, it is nothing but an agreement on the credit. Consumers are allowed to pay the outstanding balance in full or partially. The credit can be repeatedly used to a certain limit, provided that the account is open and repayments are made on time. Available credit, minimum payment, and the balance will fluctuate depending on the purchases and payments made through the account. Typically, no interest charges are levied when the used amount is repaid within 48 days.
Chargeback/disputes
In the case that you find an error in the monthly statement sent to you by the issuer, you can write back with a chargeback or raise a dispute. The issuer should acknowledge your letter within the stipulated time of 30 days post receiving it. It is essential to understand the dispute terms of your card issuer as you can encounter a billing discrepancy at any given point.
Credit limit
The credit limit is the allowed amount that you can spend through your credit card during per credit cycle. Factors such as your usage pattern and your repayment history will cause a change in your credit limit over time. The credit limit is likely to increase if you make regular payments. Conversely, late payments can lead to an increase in the credit limit.
Over limit charge
When the transaction exceeds the credit card limit laid down by the issuer, you can be charged an over limit. Typically, this fee is flat but it is reflected on your credit report and is not very healthy for your credit score.
Balance transfer
Balance transfer is growing to become a very common term. It allows you to transfer the balance from one credit card to another. This is a move that can help you avail of lower interest rates on your credit card balance.
Knowing the above listed terms and understanding their implications is essential to derive the best value of your credit card. It will help you make the right decisions when using plastic currency.
Read more to know all about credit card balance transfer here.
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