“Credit alert”, “Debit alert”, “Transfer charges”, “Transfer limit” and many more are some of the terms we use when talking about our debit cards and debit account. Knowing these terms help us understand everything that comes with having a debit account and a debit card.
This is the same way you need to understand credit card terms. Educating yourself helps you have a healthy financial lifestyle when it comes to credit card use. To fully enjoy the benefits of a credit card, it’s important to know how to use it responsibly, and to do that, you need to stay informed. Building your credit card vocabulary is a longtime benefit to you because you get the best value out of your card.
In this article, we will outline certain terms you need to know before you get your first credit card. These 12 terms are the first step to schooling yourself about credit card lingo.
Do not be overwhelmed, these terms are easy to understand and not as complicated as they seem. Below are a couple of CredPal credit terms you should know.
- Repayment Date: The repayment date is when you are expected to pay the balance you owe. To keep your credit card active and use your credit limit anytime you want, do not miss this date.
- Billing Date: This is the date when a statement is generated and sent to you. This is always 2 days before your repayment is due.
- Billing Cycle: This is the length of time between the last billing date and the current billing date. At the end of every billing cycle, you will need to repay your credit balance so that your card can be automatically funded again for you to use.
- Payment Due Date: This is a 3 day grace period after your repayment date to pay back the amount spent or you will be charged a default fee of an additional interest of 0.5% daily. For example, a CredPal staff that receives their salary on 26, would have 26th as their billing date. While the 3rd of the following month will be the due date. It is advised that you make your repayment even before the grace period kicks in.
- Credit Card Statement: A summary of all transactions carried out on customers’ accounts in one billing cycle. Transactions include debit transactions and credit (customer repayments). Statements are only generated on the billing date.
- Credit Limit: The maximum amount you can spend on your credit card.
- Balance transfer: The process of moving part of your balance from your credit card to the bank account you used in signing up on CredPal. This makes it easy for you to spend from your account if you don’t want to make the payment from the CredPal app.
- Repayment Card: This is the card you have added to make repayments on what you have spent on your credit card. You can add more than one card for your repayment.
- Cashback: Cashback is a credit card rewards benefit that is refunded to you for using your credit card to make a purchase. It is usually a small percentage of each purchase you make with any merchant that is partnered with CredPal.
- Charges: The sum of all fees associated with using credit, to be paid to the credit card issuer or lender. Finance charges include interest, foreign transaction fees, annual fees, and any other credit-related fee.
- Annual fee: This is a credit card fee that is charged every year you still keep and use your card.
- Transaction Alert: The notification you get any time you use your credit card or make a transfer from your CredPal account into your debit account.
Read: 8 things you need to know before getting a credit card.
Just like a dictionary, the more you get familiar with these words, the more it is easy to use your CredPal credit card. Credit cards are valuable financial companions when used responsibly. If you don’t have one, then it’s time to get it. But before you sign up on CredPal for a card, you should watch this.
