The “A's” of Credit Card Terminology
Terms Every Credit Card User Should Know
If you’ve ever applied for a credit card, you're familiar with the fact that credit card companies use a plethora of confusing credit card terms. Before you apply for another credit card, you need to know exactly what those terms mean. Read our credit card glossary below to get the 4-1-1 on popular credit card terminology.
APR
Three simple letters that many consumers misunderstand. APR stands for annual percentage rate.
When you apply for a credit card, you should first confirm what the APR is. An APR of 18% or greater is considered high. Your credit history will determine the APR you qualify for. Make sure you shop around for the best APR before applying for a credit card.
Available Cash
This term refers to the amount of money that is available to you as a cash advance. Keep in mind that you will usually have to pay a high interest rate on cash advances.
Many times your cash advance limit is lower than your total credit limit, especially if you just got your first credit card recently. Your available cash is a subset of your available credit. If you have a $1,000 credit limit and take a $500 cash advance, you’ll end up with $500 available credit remaining.
Available Credit
This term refers to the total amount you can charge on your credit card. Just be careful if you end up close to your credit limit. If you have $50 available credit, and you are making a purchase for $60, sometimes the purchase will go through and put you over your credit limit. In that case, you’ll need to make an immediate payment to get below your credit limit or else you will be charged high fees.
So there are the A's of common credit card terms you need to know. Stay tuned. We'll continue to inform you about the terminology every credit card user should be aware of.