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Monday, April 21st 2014

Credit Card Glossary

Credit Card Glossary: Terms and Definitions

Confused by credit card terms? CreditCards.com's glossary of credit card definitions will help. From account holder to Regulation Z, we have defined the most-common and most-confusing credit card terms.

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Minimum payment
The minimum payment is the lowest amount of money that you are required to pay on your credit card statement each month. See your credit card "terms and conditions" document to see how your credit card's minimum payment is calculated. Until 2004, minimum payments were commonly as low as 2 percent, which meant that any large balance could take decades to pay off, if only the minimum payment was made. Under pressure from federal banking regulators, card issuers ramped up the required minimum payment. The industry standard is now to calculate the minimum in one of two ways: either 3 percent to 5 percent of the total balance due, or, all fees and interest due that month, plus 1 percent of the principal amount owed.

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