Credit Card Glossary

Plain-English definitions. Where the issuer’s marketing softens a term, our definition names what it actually means.

• Annual Fee

  A yearly charge for holding the card, billed on the account anniversary.

• APR (Annual Percentage Rate)

  The yearly interest rate charged on a credit card balance, expressed as a percentage.

• Balance Transfer Fee

  A one-time fee charged when transferring a balance from another card, usually 3-5% of the transferred amount.

• Cashback Match

  Discover's year-1 promotional doubler: at end of year 1, Discover matches all cashback earned.

• Category Bonus

  An elevated rewards rate on a specific spending category (groceries, dining, travel, etc.).

• Coupon-Book Credits

  A premium-card structure of many small monthly or category-specific statement credits.

• CPP (Cents Per Point)

  The redemption value of a single point or mile, expressed in cents.

• Credit Builder Card

  An unsecured card designed for thin-file or low-credit applicants, often with no deposit required.

• Credit Limit

  The maximum balance you can carry on a single card.

• Credit Utilization

  The percentage of your total available credit you're currently using; counts for ~30% of your FICO score.

• Effective Rewards Rate

  The cashback-equivalent value per dollar spent, after redemption friction.

• FICO Bucket

  Credit-score tier roughly grouped as poor (300-579), fair (580-669), good (670-739), very good (740-799), exceptional (800+).

• Foreign Transaction Fee

  A fee (usually 1-3%) charged when a transaction is processed outside the U.S.

• Grace Period

  The window between your statement date and your due date during which a paid-in-full balance accrues no interest.

• Hard Inquiry

  A credit pull triggered by a credit application; typically drops your score by 3-5 points.

• Intro APR

  A temporary lower (often 0%) APR offered for a set number of months after account opening.

• Minimum Payment

  The smallest amount you can pay each cycle without being marked delinquent.

• Penalty APR

  A higher APR that kicks in after a missed payment, often as high as 29.99%.

• Rotating Category

  A category that changes each calendar quarter, typically earning 5% cashback on a $1,500 quarterly cap.

• Schumer Box

  The federally-mandated rate-and-fee disclosure on every U.S. credit card application.

• Secured Credit Card

  A credit card that requires an upfront refundable security deposit, which sets your credit limit.

• Soft Inquiry

  A credit pull that doesn't affect your credit score (pre-qualification, employer checks, your own credit check).

• Statement Balance

  The total amount you owe as of your statement closing date.

• Transfer Partner

  An airline or hotel loyalty program a card issuer allows you to transfer points to at a fixed ratio.