Glossary of Credit Card Terms

Annual Percentage Rate (APR) - The APR is the interest rate charged on a loan. It is expressed as a percentage and reflects the cost of borrowing money.

Account Balance Coverage - Sometimes referred to as credit balance insurance. It is an insurance policy on your credit card account should you experience a life altering event or other hardship. Account balance coverage is typically a fee based product.

Annual Fee - An annual fee is the yearly cost of cardmembership. The fee varies with each card.

Authorized User - A person who has some privileges on a credit card account, but cannot make account changes or request certain card features.

Balance Transfer - Moving a balance from one card to another, typically to take advantage of lower interest rates.

Cash Advance - Taking out a cash loan on your credit card. Cash advances are typically charged at a higher interest rate, and can sometimes carry additional fees. Use sparingly.

Consumer Disclosure Statement - A CDS is your Canadian credit report. The statement contains information about your credit history that lenders use to determine your creditworthiness.

Credit Score - In addition to your Consumer Disclosuer Statement, lenders use a standardized credit score which attempts to classify each applicant based on previous credit history.

Equifax - One of the two Canadian credit bureaus.

Grace Period - The amount of time a lender provides for borrowers to repay a balance before accruing interest.

Instant Approval - Some credit card companies will attempt to qualify your application upon submission of an application. Typically, people with established credit histories will get a decision in seconds.

Introductory Rate - To entice potential customers, some cards offer lower rates or other benefits for a brief amount of time. Good for balance transfer and those seeking bonus rewards.

Issuer - An issuer is loosely defined as a bank that issues a credit card to a consumer.

Minimum Payment - If you carry a monthly balance, there will be a minimum amount due on a specified date. Failure to pay the minimum on time will result in fees and/or other penalties.

Net Purchases - Net purchases refer to all purchases minus any returns or chargebacks. Used in the calculation of rewards or fees.

Secured Card - A credit card with a credit limit that is backed by a deposit or savings account. These cards can be useful for people with bad credit or those new to Canada.

Security Deposit - The security deposit is the amount of funds required to open a secured card account.

Social Insurance Number - A government issued number required to work or receive benefits in Canada. Some credit card applications require your Social Insurance Number to confirm your identity.

TransUnion - One of the two Canadian credit bureaus.