UK Credit Card Glossary

Credit card terminology can be difficult and obtuse. Use our A-Z of credit card vocabulary and the associated definitions to help you understand confusing credit card terms.


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0% Purchases

0% on purchases credit cards offer a zero percent promotional interest rate on new credit card purchases for a set period of time

Account Agreement

The contract governing your open-end credit account

Account History

The transaction and payment history of an account over a specific period of time

Account Holder

The individual whose name the account is registered in, regardless of additional card holders

Account Number

The account number is the number that identifies you to your bank or issuer. For bank accounts it is usually 8 digits long and can be found on a debit card, cheque book, paying-in book or bank statement. On credit cards it is usually 9 digits long and appears on the card after the first 6 digits which identify the issuer, and before the final digit which it created algorithmically to validate the preceding numbers

Accrued Interest

Interest that has been accrued on a credit card balance

Adverse credit

A term used to describe borrowers who have a poor repayment history, or those with defaults or bankruptcy appearing on their credit report

Affinity card

Affinity cards are credit cards issued in partnership with other organisations. The majority of affinity credit cards are issued with sports club or charity branding, but some of the UK's biggest credit card brands have been affinity products in the past (and some still are)

Air Miles

A type of reward scheme where points can be redeemed for flights or other travel rewards via airline frequent flyer programs

Allocation of Payments

The rules by which credit card providers allocate payments to different parts of an overall balance, which can each attract different interest rates

American Express

The American Express Company, also known as Amex, is an American multinational financial services corporation headquartered in Manhattan's Three World Financial Center in New York City, United States

Annual Fee

An annual (yearly) fee charged by a credit card issuer for the use of a credit card, outside of any other spending-related fees or charges

Annual Percentage Rate (APR)

The cost of credit on an annual basis, expressed as a percentage

Apple Pay

Apple Pay is a mobile payment and digital wallet service by Apple that lets users make payments using the iPhones, Apple Watches and iPads

Application Form

The form which must be completed by individuals who want to apply for credit

Automated Teller Machine (ATM)

A machine, activated by a magnetically encoded card or other medium, that can process a variety of banking transactions, including cash withdrawals and accessing bank account details

Available credit

The difference between the credit limit assigned to a cardholder's account and the present balance of the account


Avios are air travel reward points earned on a credit card that allow the cardholder to turn everyday spending into flights, hotel stays, upgrades, days out and more

Bad Credit

A bad credit is a description of an individual's credit history that indicates that a borrower carries a higher credit risk. This could be because an account holder has defaulted on payments, become bankrupt, or entered into an IVA


A credit card balance is the amount owed to the credit card company

Balance Transfer

Describes the act of transferring a balance from one credit card to a new credit card (usually at a lower interest rate)

Balance Transfer Fee

The charge incurred by a consumer for balance transferring, usually expressed as a percentage of the total balance

Balance Transfer Period

The introductory period offered on existing credit card balances which have transferred to the new card, typically at 0% APR

Bank Statement

A summary of all transactions carried out since the last statement (usually monthly), including current balance, all payments, interest charged and fees incurred


In the UK, the term 'bankrupt' can only apply to individuals, not companies or other legal entities. Bankrupt individuals are those who have had a 'bankruptcy order' issued against them by a court. As such, a trustee is appointed to oversee the liquidation of the individuals' estate and return a dividend to their creditors


See Bankrupt

Billing Cycle

The period between credit card statements - typically around one month

British Bankers Association

The British Bankers’ Association (BBA) is a trade association for the UK banking and financial services sector. Its members collectively provide a wide range of banking and financial services


Headquartered in Leeds, Callcredit are one of the three main UK credit reference agencies (Experian, Equifax and Call Credit) - See Credit reference agencies

Card Activation

Card activation is the process a card holder must complete before their credit card can be used. Typical activation methods include telephone or online

Card not present

A card not present transaction is where the cardholder does not or cannot physically present the card for a merchant's visual examination at the time that an order is given and payment effected. Card not present transactions include online and telephone transactions

Card Security Code (CSC)

The CSC ("Card Security Code"), also known as CVV, is an extra security measure and is found on the reverse of a credit card and for VISA®, MasterCard® and Discover® cards it is the last 3 digits. For American Express it is the 4 digits printed on the face of the card

Card Verification Value (CVV)

See CSC number

Cash Advance

Cash Advances are offered by most credit card providers and allow cardholders to withdraw cash, either through an ATM or over the bank counter, up to a pre-set limit. Before using a credit card cash advance customers should be aware that money borrowed in this way does not attract a 'grace period'. Interest starts accruing on the money withdrawn immediately, and the interest rate applied is usually higher than the interest applied to standard card purchases

Cash Back

A form of incentive offered to holders of some credit card products, whereby they receive a cash refund (usually a percentage of the total value of a transaction) after making purchases

Cash fee

The charge imposed by credit card issuers when cash is withdrawn using a credit card (usually a percentage of the amount withdrawn). Different fees may apply to Sterling and Foreign cash withdrawals

Cash Machine


Charge Back

A request made by a credit-card provider to a retailer to make good on the loss of a fraudulent or disputed transaction

Charge Card

A form of payment card with no revolving credit facility. The account must be paid in full when a statement is issued

China UnionPay

China UnionPay is the only domestic payment network in the People’s Republic of China. It was established in 2002 by the People’s Bank of China and is now one of the World’s biggest payment processors

Chip & Pin

A method of paying for goods by debit or credit card whereby one’s personal identification number is entered into an electronic device to authenticate payments


Clubcard is the loyalty card of leading British supermarket chain Tesco

Comparison website

A vertical search engine that can be used by the consumer to filter and compare products side-by-side based on price, features, and other criteria

Consumer Credit Act (CCA)

The Consumer Credit Act 1974 (as amended by the Consumer Credit Act 2006) regulates consumer credit and consumer hire agreements

Consumer Credit Directive (CCD)

A set of rules agreed by EU member states which are designed to harmonise the regulation of consumer credit across Europe and to increase consumer protection


The use of wireless technology (RFID) to make a payment using a credit card or debit card, or other contactless device

County Court Judgement (CCJ)

A County Court Judgment (CCJ) is an order from the County Court instructing you to repay a debt. If you fail to comply with these terms or come to an agreement with the claimant, a record of a CCJ will be evident on your credit report for a period of 6 years and will adversely affect your ability to obtain credit


The ability of a customer to 'purchase' goods or services before actual payment, based on the trust that payment will be made in the future

Credit Building

Improving your credit score by showing a history of borrowing and timely repayment

Credit Card Issuer

Any financial institution that issues bank cards to those who apply for them

Credit History

A record of a person’s or company’s debt and payment of debt over a period of time, used by financial institutions to assess the risk of lending money to them

Credit Limit

The maximum amount of credit that is available on a credit card

Credit Reference Agency (CRA)

Credit reference agencies (CRAs) amass and store personal and financial information about most adults in the UK. Lenders can then utilise this information to assess potential risk

Credit Report

A credit report is an account detailing a person's financial history specifically related to their ability to repay borrowed money. Credit reports are generated from one of the three main credit reference agencies (Experian, Equifax and Call Credit)

Credit Score

A credit score is a algorithmic tool used by a lender to help determine what risk level an applicant poses


A company or individual who is owed money

Debit card

A debit card is a device that is linked to a cardholder's current account, and it can be used to purchase goods and services up the funds available in that account


A company or individual who owes money


A coloquialism used to describe the process undertaken to reach a decision regarding an individual's application

Deferred Payment

A payment postponed until a future date

Digital Credit

Digital credit is credit made available without without a physical credit card for transactions. As mobile payments increase, digital credit is likely to gain in popularity

Diners Club

Diners Club International (DCI), founded as Diners Club, is a charge card company formed in 1950 by Frank X. McNamara, Ralph Schneider, and Matty Simmons

Direct Debit

An arrangement made with a bank that allows a third party to transfer money from a person's account on agreed dates, typically in order to pay bills


Discover Financial Services is one of the biggest issuers of credit cards in the United States

Down sell

Downselling is the act undertaken by some, but not all, credit card issuers, of offering an alternative credit card to the one the customer applied and was declined for, more often than not with a lower introductory period and a higher APR

Due Date

The date on which a payment becomes due on a credit card


Visa Electron is a debit card and was introduced by Visa in 1985 . Although the account holder can only withdraw funds that are preloaded onto the card, they do have access to all the Visa ATMs


EMV is a technical standard for smart payment cards and the ATMs that accept them. Taking its name from the creators of the standard (Europay, MasterCard, and Visa), EMV cards store their data on integrated circuits rather than on magnetic strips (though they do retain the strip in order to be retrogressively compatible)


One of the 3 main credit reference agencies (Experian, Equifax and Call Credit) - See Credit reference agencies


Meaning 'Electronic Signature', this is a term that refers to any electronic data that carries the intent of a signature, typically used with online agreements


One of the 3 main credit reference agencies (Experian, Equifax and Call Credit) - See Credit reference agencies

Financial Conduct Authority (FCA)

The Financial Conduct Authority (FCA) is a financial regulatory body in the UK which operates independently of the UK government, and is financed by charging fees to members of the financial services industry

Flying Club

The frequent flyer reward program offered by Virgin Atlanic Airways

Freedom of Information

The Freedom of Information Act 2000 (c.36) is an Act of Parliament that creates a public "right of access" to information held by public authorities

Gift Card

A gift card is a prepaid payment card, usually issued by a retailer or bank, to be used for purchases within a particular store or related businesses

Grace Period

A grace period is the period during which no interest is charged on credit card transactions

Hard Search

A hard search occurs when a financial institution, such as a lender or credit card issuer, checks a credit report when making a lending decision. This typically takes place when a customer applies for a credit card


Holograms are placed on credit cards for security reasons and take the form of labels. Security holograms are very difficult to forge because they are replicated from a master hologram which requires expensive equipment

Individual Voluntary Agreement (IVA)

An 'Individual Voluntary Agreement' (IVA) is a formal and binding agreement (typically lasting 5 years) with creditors to pay all or part of ones debts. Regular payments are made to an insolvency practitioner, who then divides this money between ones creditors

Information Commissioner's Office (ICO)

The Information Commissioner's Office (ICO) is an independent authority in the UK that promotes openness of official information and protection of private information

Interchange Fee

The 'Interchange Fee' is the fee paid between banks or financial institutions for the acceptance of card based transactions


The amount paid by a borrower to a lender (in excess of the original amount borrowed) in exchange for the use of the lender's money for a certain period of time

Interest Free Period

This is the introductory period of time during which no interest is paid on credit card purchases

International Standards Organisation (ISO)

The International Organisation for Standardisation (ISO) is an international standard-setting body composed of representatives from various national standards organisations. In relation to credit cards, these standards are applicable in the size and shape, the use of the magnetic strip, the numbering system, and how smart cards can store and encrypt data

Introductory rate

An introductory rate is an interest rate charged to a customer during the initial stages of a credit card (typically 0%). Once the introductory period is over, a pre-agreed rate will then apply to all further transactions


A credit card issuer is a bank or other financial institution who offer credit cards

Issuer Group

A group of joint financial institutions, such as HBOS (which consists of Halifax, Bank of Scotland and Lloyds Bank). Transferring balances from one credit card to another within a group is not typically permitted


JCB is a credit card company based in Tokyo. It is accepted at JCB merchants, Discover Network merchants in the US and Union Pay merchants in China

Joint Account

A bank account held by more than one person, each individual having the right to deposit and withdraw funds

Late payment fee

A late payment fee is charged to a borrower who fails to pay at least their minimum payment by the payment deadline

Lending Code

This is a self-regulatory code undertaken by financial institutions which sets minimum standards of good practice


Maestro is a multi-national debit card service owned by MasterCard that was founded in 1992. Maestro cards can either be linked to a customer's bank account (like a debit card), or preloaded with funds (like a prepaid card)

Magnetic strip

This is a strip of magnetic material located on the back of a credit card. It stores details about the account holder, such as account number, personal identification number, and other such information readable by ATMs, card swipe machines (magnetic stripe readers) and other similar devices


MasterCard is a worldwide credit card corporation that works with financial institutions to issue credit and other payment cards

MasterCard Securecode

A system for enhancing online transactions made using MasterCard cards

Maximum credit limit

This is the maximum credit balance permitted by your card issuer


A type of business with a bank account that allows that business to accept and process debit and credit card transactions

Minimum credit limit

The minimum credit amount that will be offered by your card issuer

Minimum Payment

The amount a customer must pay every month to maintain their credit agreement. The minimum payment covers interest and a small percentage of the ongoing balance

Mobile Wallet

A way of linking payment cards directly to a mobile phone for use contactlessly (eg ApplePay)

Money transfer

Money tranferred from a credit card to a current account

Near Field Communication (NFC)

Near Field Communication' (NFC) is a short-range wireless connectivity technology that enables convenient short-range communication between electronic devices (such as credit card contactless payments)


Nectar is a loyalty card scheme run by Aimia. The scheme is the largest of its kind in the United Kingdom, and comprises a number of participating companies including Sainsbury's and BP

Non Sterling Transaction Fee

The fee charged by some issuers for overseas purchases - traditionally a percentage of the amount of the purchase

Office of Fair Trading (OFT)

The Office of Fair Trading (OFT) was responsible for protecting consumer interests throughout the UK. Its responsibilities have now been passed to a number of different organisations

Online Banking

A service that allows an account holder to obtain account information and manage certain banking transactions through a personal computer

Outstanding balance

The amount that is owed to the bank after taking into account all purchases, payments and fees

Over credit limit fee

An over-the-limit fee is charged when a credit limit is exceeded through purchases, fees, or finance charges

Payment Card

A payment card is a device that enables its owner (the cardholder) to make a payment by electronic funds transfer. The most common types of payment cards are credit, debit and prepaid cards

Payment Network

Credit card networks facilitate the payment process between credit card users, merchants, and credit card issuers, and stipulate where credit cards can be used. Visa, MasterCard, American Express and Discover are the four major credit card networks

Payment Terminal

A payment terminal, also known as a 'point of sale terminal', is a device which reads and interacts with payment cards to make electronic funds transfers

Per Annum

For each year

PIN (Personal identification number)

A personal identification number (PIN) is a numeric password (typically 4 digits long) used to authenticate a user to a system, in particular in association with an ATM card

Platinum Card

Whilst it used to be the case that 'Gold' and 'Platinum' cards were perceived as prestigious and only available to the affluent few, this is no longer the case, as they are readily available and do not necessarily offer the extra benefits or rewards of yesteryear


Points can be earned on a credit card as money is spent on it. These points can then be redeemed for merchandise or travel discounts, depending on the terms of the scheme

Prepaid credit card

A card issued by a financial institution that must be preloaded with funds before use and can then can be used in all establishments that accept that issuer's brand of card

Radio-Frequency Identification

Radio-Frequency Identification (RFID) is the technology that allows contactless payments to transfer data via a microchip in a credit card to an antenna on the payment terminal

Representative APR

A Representative APR (Annual Percentage Rate) is the percentage rate that is offered to at least 51% of applicants, including any fees

Representative Example

A representative example is a set of figures provided in order for customers to be able to better understand the charges associated with a card and to compare with others. The interest rate is stated as a percentage and shows what at least 51% of customers would pay. It needs to include whether the interest rate is variable or fixed and needs to include any fees associated with the card

Returned payment fee

A charge that a credit card company will impose on a customer if that customer attempts to pay a credit card bill with insufficient funds (for example via direct debit or with a cheque)

Revolving balance

A credit agreement (typically a credit card) that allows a customer to borrow against a pre-approved credit limit when purchasing goods and services. The balance does not have to be paid in full every month, though interest is paid on any monies remaining on the card after a given period

Reward Scheme

A scheme which is offered by a store or a group of stores which allows customers to get price reductions or other offers according to the amount that they spend

Risk Based Pricing

Risk Based Pricing is the method by which lenders try to measure loan risk. Each lender has their own individual criteria, and this level of risk is then reflected in the type of card offered in terms of introductory period and APR


A system for enhancing online transactions made using American Express cards

Secured credit

A type of credit card whose balance is secured by a savings account. The limit a customer is offered tends to be a percentage of the savings account and ranges from 50% to 100%

Signature strip

A signature strip is an area on the back of a credit or debit card coated with a white or gray material on which a customer signs their name

Signature verification

Signature verification is a technique used by banks to validate the identity of an individual. Signature verification is often used to compare signatures in bank offices and other branch capture

Soft Search

A soft search occurs when a financial institution offers to pre-check a customer's likelihood of being accepted for a credit card, without leaving a 'hard search' on their credit report


A credit card statement is a summary of all activities undertaken, including purchases, payments, interest and fees

Store Card

A credit card that is issued by a particular institution that limits its use to their stores only

Subject to status

In simple terms 'subject to status' means that credit will only be offered if the customer fulfils the issuer's criteria in terms of residency, assets, income, credit score etc

UK Cards Association

Authoritative trade association for the cards industry in the UK

Unsecured credit cards

Unsecured credit cards are not secured by collateral

Variable interest rate

Any interest rate that does not remain fixed


Any credit, debit or prepaid card branded by Visa Inc., a major payments technology company. Visa cards can be recognised by their distinctive logo

Verified by Visa

A system for enhancing online transactions made using Visa cards