Nobody knows everything. We put together a list of common terms that might come up in the world of credit cards and personal finance to help out anyone who may need it. We hope this helps send you in the right direction.
Common Terms:
APR: “Annual Percentage Rate”. Credit Card companies will usually charge an interest in exchange for you to carry over unpaid balances on your card. You can avoid paying this interest if you pay off your card on time. But if you pay less than the full charges, some additional interest may be added to your future payments. This is sometimes split into an “Intro APR“, which is the APR that you get during an introductory/new period with a card, and a “Standard APR“, which is the APR that you will have once the intro period expires. Basically- the higher the APR, the more interest you will be vulnerable to paying. Stick it to the man and avoid paying interest whenever possible.
Auto Rental Collision Damage Waiver: This is similar to the optional insurance that you are able to purchase when renting a car. Some cards have this feature built in so as long as you make the purchase on this card, you are automatically covered and don’t need to purchase the extra insurance. This doesn’t mean all liability is off your shoulders, but some added protection always helps.
Available Credit: Credit cards and accounts will have a maximum dollar amount that you are able to spend per billing cycle, usually monthly. This cap of available credit is dependent on some of your personal factors, and will tell you how much money you’re currently able to spend using that card.
Balance: The total amount owed on a credit card account.
Balance Transfer: A transfer that moves some or all balance from one card onto another card. This can sometimes be done to avoid paying higher interest on a specific card. This will usually have some type of extra fee attached though, often in the 3-5% range of the amount that is transferred.
Extended Warranty: Some cards will offer protection for items that you purchase using that card. This protection will sometimes extend beyond the standard warranty that the product manufacturer’s offer, so it is worth keeping an eye out for. Basically, you have options to get a replacement, repair, or reimbursement if something goes wrong with an item that you bought using a card that has this feature.
Foreign Transaction Fee: Any transaction that occurs or is processed in a foreign country, or involves foreign currency. Most cards associated with travel will waive this fee.
Global Entry/TSA Precheck: The best way to travel. This allows you to skip most security lines while keeping your shoes and clothes on when passing through security. Computer and liquids can usually stay in your bag. This is important to all those who enjoy the finer things in life and also fly often. TSA Precheck is relevant for most flights departing from inside the US, and Global Entry is relevant when traveling internationally, allowing a much better/faster experience while going through customs and border protection protocol.
Lost Luggage Reimbursement: It is extremely rare for airlines to flat out lose your bags, but it does happen occasionally. The more common scenarios would be your luggage gets damaged, sent to the wrong place, or some other form of being “mishandled”. This feature allows you to claim reimbursement for all of these scenarios up to a certain dollar price. Read or ask about your cards specific feature for more details, but this is the basic idea
Purchase Protection: This feature will give you the possibility to get replacement, repair, or reimbursement for stolen/damaged items. Each card and network (Visa, Mastercard, etc.) will have slightly different options. But this is another helpful feature to keep in mind because things get lost/stolen/damaged all the time.
Secured Card: This is a card that requires collateral in order to use the credit. This collateral is often given through a cash deposit into the card account. This can be used by people that don’t qualify for other credit cards due to no credit or even bad credit. This can be used as a step towards rebuilding credit.
Travel Accident Insurance: An insurance policy that will help protect you if any accident were to happen while traveling, as long as the travel purchases were made on that card. The specific policy can vary depending on the card/bank, but this will generally act as a protection against travel liabilities such as lost or delayed luggage, protects your flight purchase in case you need to change plans or cancel, and may even financially protect you during the rare occasion that you are injured or killed while traveling.
Trip Cancellation/Interruption Insurance: Trip Cancellation provides reimbursement for non-refundable and prepaid expenses involved when a trip gets cancelled or delayed due to a “covered situation”. Interruption Insurance provides help with expenses caused by needing to return home during a planned trip. Additional expense reimbursements could be possible depending on the situation, so keep this in mind and explore your options so you will know that not all hope is lost if this ever happens to you.