Credit card
A payment card that lets its holder borrow money from the issuer for purchases or cash advances, with repayment governed by terms, interest, and fees.
Payment authorization: The process by which a payment network checks whether a transaction may proceed. The issuer approves or declines a credit-card purchase before funds are settled.
Revolving credit: A credit arrangement that allows borrowing, repayment, and borrowing again up to a limit. Most credit cards let balances revolve rather than requiring full repayment each month.
Cash advance: A short-term loan obtained through a credit account, commonly by withdrawing cash or using a convenience check. Credit cards can provide cash advances, often with separate fees and interest rules.
Debit card: A payment card that usually draws funds directly from a linked deposit account. Unlike a credit card, it generally spends deposited money rather than borrowed funds.
Credit card debt: Money owed on credit-card accounts, including outstanding balances and accrued charges. Unpaid card balances can grow through interest and fees.
Credit card statement: A periodic record of account transactions, fees, payments, and the amount due. It records purchases and establishes the balance and payment deadline.
Minimum payment: The smallest amount a borrower must pay by a due date to keep an account current. Paying only this amount can leave the rest of the card balance accruing interest.
Balance transfer: The movement of debt from one credit account to another, often to obtain different interest terms. Cardholders may move balances to a card with a promotional rate.
Charge card: A payment card whose balance is generally due in full each billing cycle. It differs from revolving credit cards, which commonly allow balances to carry over.
Compound interest: Interest calculated on both an original amount and previously accumulated interest. Carried balances can become more costly when interest compounds.