Credit Card Jargon: The Terms That Fly Over Your Head Explained

credit cards explained

What’s the difference between a ‘money transfer’ and a ‘balance transfer’? No clue? You’re not alone. Not to worry, you’ll no longer need to carry out extensive research to understand credit cards. Simplifying your finances, once again, we’ve done it for you 😉.

Below is a table of the most confusing credit card jargon out there. You’ll no longer be tricked into contracts you don’t understand.

Take control of your credit card:

JargonDefinitions 
Current BalanceThe cash you have in your account after charges have been taken into consideration, but have not yet been removed from your account.
i.e. Bank withdrawals, deposits, and other banking transactions. 
Available balanceThe amount of cash immediately available to you. Any pending charges to your card will be taken away from the available balance so you can only see the amount of cash available for you to spend.
Available CreditThe amount of cash you have available to spend.
Balance transferMoving an existing debt from one credit card provider to another.
Money transferMoving money from your credit card into your bank account. This could be to pay off an overdraft or other debts.
APRThis stands for annual percentage rate. APR is the yearly cost of borrowing money using credit cards or loans.
InterestThe fee charged for borrowing money by use of the credit card.
Annual fee A yearly fee which the customer pays for the benefits that the credit card comes with.
CashbackAn incentive you receive for making a purchase. When you make a purchase, you’ll receive back a percentage of the money spent.
Bad creditBad credit occurs when a consumer is often unable to pay off a debt on time and in full. People with bad credit will often have a low credit score.
Good creditGood credit occurs when a consumer consistently pays off the credit card debts on time and in full. People with good credit will often have a high credit score.
Credit Score A numerical expression which evaluates a consumer’s creditworthiness.
Foreign transaction feesA charge which is applied by a financial institution to a consumer for each transaction made abroad.
Interest-freeNo additional charges on the money borrowed.
Introductory rateAn interest rate charged to a customer within the initial stages of a loan.
Minimum paymentThe lowest amount of money a borrower is required to pay back to their credit card/ loan company each month.
Representative APRThe APR rate that is advertised. This means some people will get this rate, but others might get a different one, which is usually higher.
Balance Transfer FeeThe fee charged by a financial institution for allowing the customer to transfer their balance from one credit card to another.

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