In this section

A

Activation

When you get your new credit or prepaid card, you'll need to 'activate' it before you can use it. This is simply a measure to show you received the card safely.

Additional Cardholder

A person you ask your card provider to issue a card to, or to provide cheques to, for them to use on the same account.

APR

APR stands for Annual Percentage Rate. If you have a credit card, the APR is the cost of using your card to borrow money over a 12 month period. Card providers can change the APR at any time, however they’re obliged to notify you when they do.

Arrears

'In arrears' is the phrase that's used if you've missed a repayment on your credit card.

ATM

ATM stands for Automatic Telling Machine, also known as a cash machine or cashpoint.

B

Balance transfer

A payment you ask your card provider to make from your account to another financial institution which is not a money transfer and which pays off or reduces the amount that is owed to them.

Bank transfer

This is when you transfer money from your bank account to your credit or prepaid card. Sometimes known as a ‘cash transfer’. Not to be confused with a `money transfer’ sent via a credit card.

Business day

Our business days are Monday to Friday 9am to 4pm, except for bank holidays or public holidays. A lot of the things we do for you, such as clearing a payment, only happen during this time. You can continue to service your account by logging into online service or contacting us 24 hours a day, 7 days a week.

C

Card fee

A fee which may be charged, usually monthly or annually, for running your account.

Cash advance/Cash Withdrawal

This is when you withdraw cash using your credit card. You can do this at a cash machine, and with some cards, over the counter at a bank or shop. You may be charged a fee for this.

Cash transaction

A transaction under which you receive a cash or cash substitute by using your card or card number, including foreign currency, traveller’s cheques, postal orders, gambling transactions and any electronic transfers of cash which are not money transfers.

CCJ

This stands for County Court Judgement.

If a county court has ordered you to pay money, you have a CCJ.

CCJs are recorded on a register. If you pay your debt within a month it can be removed from the register, or if you pay after a month your CCJ can be marked as ‘satisfied’. To have your CCJ removed or marked as ‘satisfied’, you need to make an application to the county court, including proof of your payment and a small fee.

When you apply for a credit card, the provider will check if you have any CCJs to help them decide whether to lend you money or not.

Credit card

A credit card is a handy way to buy things without having to carry loads of cash around with you. When you buy something with your card, the credit card company pay for it, effectively lending you the money. Then you pay them back at the end of the month, or in instalments over several months.

Credit card cheques

These are cheques you can use to pay bills or transfer money into your bank account. When you write a credit card cheque, the amount is added to your credit card balance. You are normally charged a one-off fee for each cheque you use.

Credit card number

This is the 16 digit number across the front of your credit card. American Express cards have 15 digits.

Credit history

Like your credit file, your credit history gives details of your credit arrangements and payments. However, your credit history will cover a longer period of time – usually a number of years.

Credit card providers may look at your credit history when they decide whether to lend you money or not.

Credit rating

This is a ‘score’ based on the information in your credit file, showing how likely you are to repay any money you borrow. Credit card providers look at your credit rating when they decide whether to lend you money or not.

Creditor

A company that lends money to another company or individual.

CVV

CVV refers to Card Verification Value also known as Card Security Code. This is the last 3 digits next to the signature strip on the back of the card. If you’ve got an American Express card, it’s the 4 digits on the front of your card to the right.

D

Debit card

A way to pay for something by taking the money straight from your current account.

Debt collection agency

A company which collects debts. They might do this for a creditor, or they might buy the debt from the creditor and then collect it for themselves.

Default charges

This is a charge made by your credit card provider if you miss a repayment, make a late repayment, or go over your credit limit. This may also include any other reasonable out-of-pocket fees, legal or other costs incurred as a result of the cardholder breaking the agreement.

Default notice

If you miss repayments on your credit card, your card provider may take legal action to collect the debt. Before they can do this, they have to send you a default notice – a legal letter detailing what’s going to happen.

Default notices will show on your credit file for 6 years, so you should do your best to avoid them and speak to your credit card provider straightaway if you can’t make a repayment.

Direct debit

When you set up a direct debit, you allow a company to take money directly from your bank account. Direct debits are a great way to make sure you never miss a payment, and that your payments always come out of your account on time.

E

Euro

The official currency of the European Union. Sixteen of the twenty-seven countries in the European Union use the Euro as their currency.

Eurozone

This is the name given to the 16 countries in the European Union which have the Euro as their currency.

E-voucher

You can use an e-voucher to top up your prepaid card. Simply buy the e-voucher, then enter the codes online to add the voucher amount to your prepaid card.

Expired card

If the expiry date on your credit or prepaid card has passed it’s an ‘expired card’ and you’ll no longer be able to use it.

Extended Persistent Debt

If in persistent debt for 36 months your account will be classed as being in ‘extended persistent debt’.

F

Foreign exchange fee

This fee is applied when you spend on your credit card abroad. Most credit cards have a foreign exchange fee, so check your terms and conditions for full details.

H

Handling fee

Any charge the card provider adds to your account for balance transfers, cheque transactions, money transfers and for cash transactions.

I

Interest-free period

The period of time when you can spend on your credit card without being charged any interest.

Introductory rate

A period of time when you’re temporarily charged a lower interest rate on your credit card purchases or balance transfers.

IVA

This stands for Individual Voluntary Arrangement – a special agreement between a person and all their creditors to pay back any money owed.

An IVA is a lower repayment than you’d normally be expected to make, to help people who are struggling with their debts.

L

Late payment

This happens when your credit card repayment doesn’t reach the credit card provider by your payment due date.

Late payment fee

The charge for making a late payment. This is also known as a default fee.

Loading

Putting money onto your prepaid card so you can spend on it.

M

Merchant

A retailer (e.g. a shop, restaurant or petrol station).

Minimum repayment

The minimum amount of money you have to repay your credit card provider each month. Your minimum repayment is usually a small percentage of the total amount you owe.

Money transfer

A transfer of funds from your credit card to any personal account held by you at another financial institution other than into a credit card or loan account or any other transaction you make using a facility to pay other bills.

N

Network

Credit & Prepaid Cards use a payment systems provider (network) to transfer payments. The major networks in the UK are Mastercard, Visa and American Express. Each network works with both card issuers and retailers which allow the consumer to use their card to pay for goods. Each network works with a differing number of card providers and retailers across the globe, meaning that in certain parts of the world not all of the networks will be accepted.

O

Overlimit

When the amount of money you owe on your credit card is more than your credit limit.

Overlimit fee

The fee for going over your credit limit. This is also known as a default fee.

P

Payment due date

The date your credit card provider needs to receive your minimum repayment. It’s really important to make your minimum repayment on time each month so you don’t get charged a late payment fee.

PayPoint

You can use PayPoints to top up your prepaid card. There are PayPoints across the UK – you’ll find them in shops, garages and off-licenses.

Permitted Third Party Providers

A service provider that is authorised to provide information or payment related services on certain online accounts. There are two main types of permitted third party providers:

  • Account information service providers (“AISP”) – these providers gather online information from multiple payment accounts in one place and offer you a view of all of your finances in a single place.
  • Payment initiation service providers (“PISP”) – these providers facilitate the use of online banking to make a payment from a payment account on your behalf. This gives you another way to pay retailers online or transfer money between different accounts, depending on the service that the PISP provides.

The use of these services is completely optional and you must give permission to a permitted third party provider to act on your behalf.

Persistent Debt

The definition of persistent debt, as set out by the Financial Conduct Authority (FCA), is where, over a period of 18 months, a customer pays more in interest, fees and charges than repaid from their credit card balance.

PIN

This stands for Personal Identification Number. This is issued or approved by the card provider to be used with the card.

PPC/PPI

This stands for Payment Protection Cover/Insurance. It’s a type of insurance product which is designed to protect your repayments under the Credit Card agreement.

Prepaid card

A prepaid card can be a great alternative for people who don’t like the idea of building up credit card debt, but like the convenience of using a card instead of carrying lots of cash.

Unlike a credit card where you effectively go into debt every time you spend on the card, with a prepaid card it works the other way round. You load up your card with money first, then go out and spend on it until your balance runs down, then you top it up again.

Promotional offer interest rates

Like an introductory rate, this is a period of time when you’re charged a lower interest rate on your credit card purchases and/or balance transfers and any other promotional offer interest rates given to you from time to time.

R

Redemption fee

The fee for redeeming money from your prepaid card (i.e. claiming back money you’ve already loaded onto your card).

Restricted prepaid card

All prepaid cards have a limit on the amount of money you can load onto them and spend. ‘Restricted’ prepaid cards simply have a lower limit than normal.

Restricted cards are usually offered to people if the card provider hasn’t been able to check their identity.

Retail transaction

When you use your credit or prepaid card to buy something (sometimes called a ‘Card Purchase’).

S

Service charges

Any charges added to your account which is not for the day to day running of the account such as copy statements. You will be told what these changes are when you request a service.

Statement

This is a monthly summary of your credit card transactions and fees. With a credit card, your statement also tells you your interest charges, minimum repayment and payment due date.

Statement date

The date your credit card statement is produced (not the payment due date).

Statement period

The period starting on the day after your last statement date and ending on your next statement date. The statement period for your first statement starts on the day your account is opened.

T

Terms and conditions

The legal agreement between you and your credit or prepaid card provider. Your card provider should give you a copy for you to keep when you’re accepted for a card.

U

Unsolicited Credit Limit Increase

An unsolicited credit limit increase is an offer to increase your credit limit. The offer may be applied automatically, or only when permission given, depending on your chosen preference.

V

Variable rate

An interest rate which varies from time to time, for example, it may go up and down in line with the Bank of England base rate.