9 Credit Card Definitions to Know
Credit cards are a great financial tool for anyone beginning the journey of building credit for future opportunities. From a cell phone plan, a business loan, or becoming a homeowner—credit cards can help pave the way to new adventures, and may even have their own perks!
Start by getting familiar with credit card definitions and what they mean for every card holder.
1. Annual Fee
A fee automatically charged once a card account, ranging from $25 to $500 depending on the type of card. Most high-rewards earning credit cards charge an annual fee. You can avoid annual fees and receive great benefits with a credit card through your credit union.
2. Annual Percentage Rate (APR)
The interest price paid for borrowing money on your credit card. On most cards, you can avoid paying interest on purchases if you pay your balance full each month by the due date.
3. Balance Transfer Fee
The price charged when you move a balance from one card to another, typically 3-4% of the balance amount transferred.
Your credit union currently offers a no balance transfer fee until 4/30/18. See our Balance Transfer promotion.
4. Credit Score
A three-digit number summarizing how well an individual has handled credit and debt.
FICO stands for Fair Issac Coorporation. To create credit scores, they use information provided by one of the three major credit reporting agencies — Equifax, Experian or TransUnion.
5. Credit Report
Compilation of the credit history of an individual, based on past credit vs. debt repayment. Get your free annual credit report.
6. Foreign Transaction Fee
A surcharge on purchase/transactions made overseas, typically between 2-4% of the purchase amount. If you travel overseas, make sure you have a card without these fees and preferably with an EMV chip.
7. Schumer Box
A standardized disclosure with terms and conditions, including current interest rates for credit card offers, that makes it easy to compare card accounts.
8. Secured Credit Cards
Credit cards with pledged savings on deposit as collateral. This type of card is preferred for anyone with no credit history or past credit problems. Check out our Secured Platinum Visa.
9. Unsecured Credit Cards
This is the more common type of credit card, which doesn’t require a deposit. Individuals qualify for unsecured cards based on credit history, financial strength and earnings potential.
Use our free online Credit Management tool to learn more about reading credit reports and get tips on how to keep your credit score healthy.
The Bottom Line
The more you know about credit cards, the better armed you are to make good financial decisions. Your credit union wants to empower you with great tools to help achieve your financial goals. Get started by applying for your Visa credit card online—it’s easy! Questions about our Visa credit cards? Contact us online or reach our Contact Center at 1-877-325-2848.
