Commonly Used Terms

The following is a list of terms we use throughout this website, and also terms you might have heard or read before.

Maybe you have a clear understanding of these, maybe you have a vague idea, or maybe you do not really know exactly what they mean. It is always good to have a clear definition on onepage that you can bookmark and refer to anytime you need.

Read also Credit Card Act of 2009

We will try to explain these terms in plain words, as much as possible.


It is the annual percentage rate that credit cards or loans usually charge you. It was established as a way so that you could compare them easily between different loans. In the past there was no common way, and it was difficult to compare. If you multiply the credit card balance in a year by this percentage, it will approximately give you the amount in finance charges the credit card charges you in a year. It can be lowered significantly with our debt management program.

Credit line

Or Credit available. It is the maximum amount the credit card allows you to charge. Similarly, cash advance credit line is the maximum cash advance allowed. Many credit cards will charge you a higher interest rate on cash advances than on regular purchases.

Balance transfer

It is a way by which you can transfer a balance from one credit card to 0ther that might offer you better benefits. It might be a sign that you are in debt, since you are not really paying off a credit card. If you do it too many times, it is considered to lower your credit score.


It is a legal procedure in which a court declares you unable to make payments, and creditors cannot collect from you. Please see our understanding bankruptcypage for more information.

Average daily balance

It is the balance on which a credit card finance charges is calculated.

Cash advances

Please see credit line.

Collection agencies

Once a debt is declared unrecoverable by a credit card company, they will sell the debt to a collection agency, which will be in charge of collecting it from you. This shows detrimental in your credit report. At our company we can many times recall the account from the collection agency back to the original creditor which is very good for your credit.

Credit bureaus

There are about three thousand in the United States. They are agencies that share your history of payments, public record and other financial personal data. The three most commonly know are Equifax, Experian and Transunion. You can find their information at our outside resourcespage.

Credit Card

A physical device that is used on stores linked to a worldwide network. In our opinion is a way so that you become indebted, although it might be useful in limited circumstances. Please see our Understanding credit cardspage.

Credit Report

The credit file information that credit bureaus have on most consumers in the United States. It usually contains information such as any public records, your payment history, loans and credit cards information, and others.

Credit Score

Different bureaus use a different score to measure your creditworthiness. It generally varies from 0 to 850. Each lender and bank uses their own criteria for extending credit to you, and they can base those criteria on your credit score. It gives them an idea of the risk they are taking when extending credit to you. There is not cut off line between a good or bad credit score. But the better score you have the better mortgage loan rates, and lease rates you will get.

Due date

The date that a credit card will request your payment to arrive. If it does not arrive on that date, they will usually charge you a late fee, and if it arrives 30 days after they might report on your credit report that you are 30 days past due. Many credit card companies will let you change this date to a date that is more convenient for you if you request it.

Electronic fund transfers (EFT)

It is a method of paying your obligations by authorizing the company to debit you checking or savings account electronically either one time or on a consecutive basis. It is generally a safer way to make payments, sine their rate of loss or inaccuracies is extremely low.


A technology which makes it extremely difficult to break in and listen into communications that travel through the internet. Our website uses 128 bit encryption, which would take many computers working together and thousands of years to decrypt your data. For a more detailed explanation please visit our outside resourcespage

Finance charge

The amount in dollars that a credit cards charges based on the balance and the annual percentage rate they charge you. Please see above APR.


A legal procedure in which you could lose title to your real state property. It can be initiated by real state liens, and in general by the courts.

Grace period

The time allowed by a credit card, in which if you make the payment in full, they will not charge any additional finance charges. Please see finance charges above.

Identity Theft

Credit that is obtained sometimes instantaneously at many department and specialty products stores. Please see about our our Top 12 strategies to avoid ID theft since it might be easier for unauthorized people to take advantage of this.

A credit card in which you apply together with a spouse or family member. Please see about our our Top 12 strategies to avoid ID theft since it might be easier for unauthorized people to take advantage of this.

Late fees

A fee assessed by your credit card company if they do not received the payment required by them on their due date. Please see due date above.

Minimum payment

The payment required by your credit card company so that you keep your account in good standing. It usually lowers as you make payments. Ideally you would keep on paying a fixed amount so you can become debt free faster.

Mortgage loan

A loan that is secured by real state property

Over-limit fee

A fee that is usually charge by credit card companies if your balances exceed your credit limit. It averages $35.00 and credit card companies usually waive it for members enrolled in our debt management program.

Past due fee

A fee that is usually charged by credit card companies if the minimum payment requested is not received by their due date. Please see above the definitions of minimum payment and due date.

Principal balance

The balance on a credit card or loan, based on which they calculate your minimum payments and finance charges.

Promotional transfer offers

An offer to process a balance transfer. It might just keep you in debt. Please see above balance transfers.

The Federal Trade Commission

An independent agency of the United States federal government that maintains fair and free competition; enforces federal antitrust laws; educates the public about identity theft. Please visit our outside resourcepage for more information on them.