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.
- Interest rate
- Simply put, an interest rate is the price a lender charges for loaning money. On credit cards, interest rates are a little trickier, because lenders set multiple interest rates. For example, you may have a low, teaser (introductory) rate when you open an account, followed by a higher standard rate for purchases, which turns into a penalty rate if you pay late. So you may end up owing a balance to a credit card company with multiple interest rates.
Interest rates on credit cards are expressed in a standardized way so consumers can more easily compare cards. That standard way is known as the APR, which stands for annual percentage rate.