Chapter 4: 4-6

Credit Card Statement

An accounting of the credits and debits in the form of a monthly report sent to a credit card holder.

Minimum Payment

An amount that is the lowest payment the credit card company will accept for the current billing period.

Previous Balance

Any money owed prior to the current billing period.

Mean

Often referred to as average; the sum of all the numbers in a data set divided by the number of elements in the data set.

Fair Credit Billing Act

Protects you if there are any errors in your monthly statement.

Monthly Periodic Rate

The APR divided by 12; the rate of interest charged each month.

New Balance

The amount currently owed on a credit card.

Number of Days in Billing Cycle

The amount of time, in days, covered by the current bill.

Average Daily Balance

The average amount owed per day during a billing cycle.

Billing Debt

The date that a credit card company that a credit card statement was written.

Billing Date

The date that a credit card company that is used for calculating a credit card bill.

Available Credit

The difference between the maximum amount allowed and the actual amount owed on a credit card.

Payment Due Date

The due date, or the date the monthly payment must be received by the creditor.

Finance Charge

The interest that is charged to a buyer when paying for a purchase or service over time.

Fair Debt Collection Practices Act

The law that prohibits the creditor from harassing or using unfair means to collect the amount owed.

Electronic Funds Transfer Act

The law that protects debit card users against unauthorized use of their cards; users are not responsible for purchases made with a lost or stolen card after the card is report missing.

Credit Line

The maximum amount that a person can owe on a credit card at one time.

Impulse Buying

When a consumer purchases something to which they suddenly were attracted and had no intention of buying.

Credit Calendar

A calendar method of finding the average daily balance of a credit card.

Debit Card

A card that acts like an electronic check and is not a credit or charge card; with each purchase, the amount is deducted from a checking account; purchases may not exceed the balance in the account.

Debit/Credit

A debit is the amount charged to an account; a credit is payment made to reduce your debt; credits are identified by a negative (-) sign.

Truth-in-Lending Act

A law that offers protection if a credit card is lost or stolen; if a consumer contacts the credit card company immediately after losing a credit card or the card is stolen, the maximum liability is $50.

Credit Card

A plastic card that entitles its holder to make purchases and pay for them later.

Billing Cycle

A predetermined amount of time set by the credit card company that is used for calculation a credit card bill.

Transaction

A purchase, cash advance, or payment made using a credit card.

Charge Card

A special type of credit card where the monthly bills for all purchases must be paid in full and there is no interest charged.

Revolving Charge Account

A type of credit card where the entire bill does not have to be paid in full each month; there is a minimum monthly payment and finance charge the month following any month in which the bill is not paid in full.

Account Number

A unique number that identifies a credit card holder.

Late Charge

The penalty charged for late payments from a previous month.

New Purchases

The sum of purchases or debits on an account.

APR

The yearly interest rate.

Payments/Credits

Total amount received by the creditor.