e-wisdom.com glossary » Credit Cards

Additional Cardholder

e-wisdom.com editors — Wed, 04 Nov 2009 19:58:06 +0000

An authorized person can use a credit card if the original cardholder notifies the company with the necessary information. Repayment of debt generally lies solely with the original cardholder.

Authorized User

e-wisdom.com editors — Wed, 04 Nov 2009 19:57:31 +0000

A person authorized to use a credit card account, sometimes with a card issued to that name, but who does not have the responsibility to pay the bill. Contrast with joint credit, and see piggybacking for another aspect of this term.

Automatic Payment

e-wisdom.com editors — Wed, 04 Nov 2009 19:55:57 +0000

A payment that is automatically transferred from the customer’s bank account to pay a bill (e.g. a monthly credit card bill), usually at a specific amount and on a certain date each month.

Available Credit

e-wisdom.com editors — Wed, 04 Nov 2009 19:55:24 +0000

The amount remaining of a credit line (e.g. a credit card), after subtracting the existing and outstanding charges on the account.

Balance-to-Limit Ratio

e-wisdom.com editors — Wed, 04 Nov 2009 19:54:47 +0000

A factor in determining a credit score, the ratio which compares the amount of credit available to the consumer (i.e. limit) compared to the credit already used (i.e. balance). A lower balance-to-limit ratio can reflect positively on a credit score.

Cardholder Agreement

e-wisdom.com editors — Wed, 04 Nov 2009 19:53:20 +0000

The document of terms and conditions for an issued credit card. The agreement includes the APR, the formula for minimum payments, explanation of various fees, and an explanation of the dispute resolution process.

This agreement is binding. However, the issuer can, with sufficient notice, change the terms and conditions at any time. If the cardholder does not agree to changes, he is legally able to close the account and repay any remaining debt according to the original agreement.

Chargeback

e-wisdom.com editors — Wed, 04 Nov 2009 19:51:37 +0000

A credit card user has the right, under certain circumstances, to dispute a charge and ask for a reversal of charges. With sufficient evidence, the card issuer will charge the merchant for the disputed amount of services or goods, and return that amount to the cardholder’s account. The merchant may also be charged a chargeback fee.

Collection

e-wisdom.com editors — Thu, 29 Oct 2009 15:11:16 +0000

A delinquent credit account goes to collections after a period of time. “Collection” refers to an effort by a company (or agency) whose task is to collect the unpaid debt. A credit line in collections can negatively affect a credit score and, in turn, make it difficult to borrow at reasonable rates.

Cosigner

e-wisdom.com editors — Thu, 29 Oct 2009 15:07:31 +0000

A person who signs the cardholder agreement with another person, usually because the other signer is underage or is not able to be approved alone for varying reasons. The cosigner is then partly or primarily responsible for repayment of the debt.

Credit Bureau

e-wisdom.com editors — Thu, 29 Oct 2009 15:06:22 +0000

A company which, upon reviewing payment histories of consumers, sells the data in the form of a credit report. In the U.S., the three main credit bureaus are Experian, Equifax, and TransUnion.