Cards & Borrowing
Credit cards, loans, APR, interest, limits, and borrowing basics explained.
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A
Annual fee
A yearly charge for holding a credit card or account.
Application fee
A fee charged when you apply for a credit product.
APR
Annual Percentage Rate, a measure of the cost of borrowing over a year, including interest and some fees.
Arranged overdraft
An overdraft limit agreed in advance with your bank.
Arrangement fee
A fee charged by a lender for setting up a mortgage or loan.
Available credit
The amount of credit you can still use before reaching your limit.
B
Balance transfer
Moving debt from one credit card to another, often to take advantage of a lower interest rate.
Balance transfer APR
The interest rate applied to transferred balances on a credit card.
Balance transfer card
A credit card designed for moving existing debt at a low or 0% rate.
Balance transfer fee
A fee charged when you move debt from one credit card to another.
Balance transfer limit
The maximum amount you can move onto a balance transfer card.
Balloon payment
A large final payment due at the end of a loan agreement.
Buy now, pay later (BNPL)
A short-term credit option that lets you split payments over time.
Buy now, pay later limit
The maximum amount you can spend using a BNPL provider.
C
Car finance
A range of credit products used to fund a vehicle purchase.
Cash advance
Withdrawing cash using a credit card, usually with fees and higher interest.
Cash advance fee
A fee charged when you withdraw cash using a credit card.
Cashback card
A credit card that returns a percentage of your spending as cash rewards.
Catalogue credit
A type of credit that lets you buy items from a catalogue and pay over time.
Consolidation loan
A loan used to combine multiple debts into one payment.
Credit builder card
A credit card designed for people with limited or poor credit history, intended to help build a positive payment record.
Credit builder loan
A loan designed to help build credit by reporting on-time payments, often with funds held until the loan is repaid.
Credit card
A revolving credit account that lets you borrow money up to a set limit.
Credit card eligibility
An estimate of how likely you are to be accepted for a specific credit card.
Credit limit
The maximum amount you can borrow on a credit card or overdraft at any one time.
Credit limit decrease
When a lender reduces the maximum amount you can borrow on a credit card.
Credit limit increase
A higher limit approved by your lender, which increases how much you can borrow.
Credit limit review
A lender’s review of your credit limit based on account activity and risk.
Credit limit usage
How much of your credit limit you are currently using.
Credit union loan
A loan offered by a member-owned credit union.
Current balance
The total amount owed on a credit account at a given moment.
E
F
G
H
I
Instalment loan
A loan repaid in fixed instalments over a set period.
Instalment plan
A plan that spreads a balance into fixed monthly payments.
Interest rate
The percentage charged on borrowed money, usually expressed annually.
Interest-free period
The time on a credit card when you are not charged interest if you pay in full.
Interest-only mortgage
A mortgage where you pay only interest each month and repay the balance at the end.
Introductory 0% rate
A temporary 0% interest rate offered on purchases or balance transfers.
L
Loan amount
The total sum you borrow from a lender.
Loan application
The process of applying for a loan and submitting your details for approval.
Loan eligibility
An estimate of how likely you are to be approved for a loan.
Loan origination fee
A fee charged for processing and setting up a loan.
Loan rate
The interest rate applied to a personal or secured loan.
Loan term
The length of time you have to repay a loan.
O
Overdraft
An agreement with your bank that lets you spend more than the money in your current account.
Overdraft fee
A charge for using an overdraft or going over an agreed limit.
Overdraft interest
Interest charged on the amount you borrow through an overdraft.
Overdraft limit
The maximum amount you can go below zero on your current account.
Overdraft repayment
Paying back money you have borrowed through an overdraft.
Overlimit fee
A fee charged when you exceed your credit limit.
P
Payday loan
A short-term, high-cost loan designed to be repaid quickly.
Payment due date
The date by which you must make at least the minimum payment.
Personal Contract Purchase (PCP)
A car finance agreement with lower monthly payments and a final optional payment to buy the car.
Personal loan
A fixed-term loan where you borrow a set amount and repay it over time.
Promotional balance transfer
A balance transfer offer with a low or 0% promotional rate.
Purchase APR
The interest rate applied to new card purchases.
Purchase card
A credit card that offers a low or 0% rate on purchases for a period.
R
Repayment term
The length of time you have to repay a loan or credit agreement.
Representative APR
The APR that at least 51% of accepted applicants are expected to receive.
Representative example
A standard example used in ads to show typical credit costs.
Returned payment fee
A fee charged when a payment fails due to insufficient funds.
Rewards card
A credit card that offers points, miles, or other rewards for spending.
S
Secured credit card
A card that uses a cash deposit as security for the credit limit.
Statement balance
The amount you owe at the end of a billing cycle, shown on your statement.
Statement fee
A fee charged for sending a paper statement or account notice.
Store card
A credit card that can usually only be used at a specific retailer.
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