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In these days, lots of people are applying for the credit cards. But it is important to know some of the important terms used in the industry of the credit cards. Let me tell you some of the terms regarding credit cards.
Average Daily Balance: The ‘average daily balance’ is the arrears on a credit card separated by the number of nights in a particular month. This number is very much important since the interest is charged on the basis of this number.
Annual Percentage Rate: This is an annual rate that customers have to pay. The Annual Percentage Rate is determined by the amount of money spend on purchasing different objects through the credit cards.
Balance Transfer: You have know all the balance transfer terms properly because it could help you to get a lower interest rate on you credit cards.
Cash-Advance Fee: You have to pay an amount of money, when you are inserting your credit card on an automated teller machine. The amount of money you are spending in this purpose is called the Cash-Advanced Fee. Generally, this fee is higher than the normal interest rates.
Finance Charge: Finance charge is the charge that a cardholder has to pay for the entire due for all the purchases. This charge is decided on mainly two facts such as the interest rate for the credit scheme and the balance for the purchase.
Minimum Payment: Basically, there is a minimum amount of money that should be paid to the credit card company. The minimum amount of money should be paid in each month to the company within a particular due date mentioned on the bill sent by the credit card company every month. Generally, the minimum payment is very little in terms of the amount of money. Pre-Approval: You may see the term ‘pre-approved credit cards’ in different credit card advertisements. After seeing those, don’t think that you could have the guarantee of having a credit card. By the term ‘pre-approval’ the particular company wants to say that you have a great chance of getting a credit card. Secured Card: When a credit card and the cardholder’s bank account is linked to each other, then that types of credit cards are called the secured credit cards. The credit card companies withdraw the monthly payment required for holding the credit card. These types of credit cards come with an excellent pro that the monthly payment will be paid in time each and every month. There is no risk of missing the monthly fee. If you have low credit score, then you may opt for these types of credit cards. Variable Interest Rate: This is the amount of money that the customers have to pay to hold some amount of money as the balance in their credit cards. The variable interest rate is decided by following the national rates of interest. Card Holder Agreement: This is the document comes with the details of the credit card and the credit card plans. The customer has to agree to all the agreement terms to own a credit card.
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