Credit Card Glossary
- APR (Annual Percentage Rate)
- The yearly interest rate charged on any balance carried past the due date, expressed as a percentage.
- Billing Cycle
- The period, usually about 30 days, during which your transactions are recorded and compiled into a single statement.
- Due Date
- The date by which you must pay at least the minimum amount due on your statement to avoid late fees and interest.
- Minimum Amount Due
- The smallest amount you can pay by the due date to keep your account in good standing, usually around 5% of the outstanding balance.
- Grace Period
- The interest-free window (typically 20-50 days) between your purchase date and payment due date, available only if you pay your bill in full each cycle.
- Credit Limit
- The maximum amount you are permitted to carry on your credit card at any given time.
- Available Credit
- Your credit limit minus your current outstanding balance and any pending authorizations.
- Credit Utilization Ratio
- The percentage of your total available credit that you're currently using; a key factor in your credit score.
- CIBIL Score
- A three-digit number (300-900) issued by TransUnion CIBIL that reflects your creditworthiness based on your credit history.
- Cash Advance
- Withdrawing cash against your credit card limit, usually at an ATM, which accrues interest immediately with no grace period.
- Finance Charge
- The interest charged on any balance carried forward past the due date or grace period.
- Annual Fee
- A yearly charge some credit cards levy for the privilege of holding the card, often waived on crossing a spending threshold.
- Joining Fee
- A one-time fee charged when a credit card is first issued.
- Late Payment Fee
- A penalty charged when you fail to pay at least the minimum amount due by the due date.
- Over-limit Fee
- A charge applied when your spending exceeds your assigned credit limit.
- Foreign Transaction Fee
- A markup (usually 1.5-3.5%) charged on purchases made in a foreign currency or outside India.
- Balance Transfer
- Moving an outstanding balance from one credit card to another, typically to access a lower interest rate.
- EMI (Equated Monthly Instalment)
- A fixed monthly payment used to repay a loan or a large credit card purchase converted to instalments over a set tenure.
- Reward Points
- Points earned on eligible spending that can be redeemed for products, vouchers, statement credit, or travel benefits.
- Cashback
- A percentage of your spending returned to you as statement credit or direct deposit, instead of reward points.
- Milestone Benefit
- A bonus reward unlocked when your spending crosses a specified threshold within a defined period.
- Add-on Card
- A supplementary credit card issued to a family member under the primary cardholder's account and credit limit.
- Statement Credit
- A credit applied to your account balance to offset charges, often used for cashback or refunds.
- Chargeback
- A reversal of a transaction initiated by the cardholder through their bank, typically due to fraud or a merchant dispute.
- Lounge Access
- A cardholder benefit providing complimentary or discounted entry to airport lounges, usually limited to a set number of visits per quarter or year.
- Fuel Surcharge Waiver
- A refund of the surcharge levied by fuel stations on credit card transactions, usually within a specified spend range.
- Co-branded Credit Card
- A credit card issued in partnership between a bank and a non-bank brand (such as an airline or retailer), offering brand-specific benefits.
- Secured Credit Card
- A credit card backed by a fixed deposit held with the issuing bank, typically offered to those with limited or no credit history.
- Contactless Payment
- A tap-to-pay feature that lets you make purchases by holding your card near a compatible terminal, without inserting or swiping.
- PIN (Personal Identification Number)
- A secret numeric code used to authorize in-person credit card transactions.
- CVV (Card Verification Value)
- The 3-digit (or 4-digit for Amex) security code on a card used to verify online and card-not-present transactions.
- Statement Date
- The date each billing cycle on which your transactions are compiled and your bill is generated.
- Revolving Credit
- A credit facility that lets you carry a balance from month to month, subject to interest, rather than requiring repayment in full each cycle.
- Hard Inquiry
- A record left on your credit report when a lender checks your credit score as part of a loan or credit card application, which can slightly lower your score.
- Credit History
- A record of how you've managed credit accounts over time, used by lenders to assess your creditworthiness.
- Welcome Benefit
- A one-time bonus, such as reward points or a voucher, given to new cardholders on activation or first spend.
- Surcharge
- An additional fee, over and above the transaction amount, charged for specific payment types such as fuel, rent, or utility bill payments.
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Explore CardsWhy Credit Card Terminology Trips People Up
Credit card statements and application forms are dense with terms that sound similar but mean very different things — APR versus finance charge, billing cycle versus due date, credit limit versus available credit. Misreading any one of these can lead to an unexpected fee or a misunderstanding of how much interest you're actually paying. This glossary exists to make those distinctions plain, in the same language used across our card comparison pages.
The Handful of Terms That Matter Most
If you only learn a few terms, make them these: your credit utilization ratio (how much of your limit you're using — a major driver of your credit score), your grace period (the interest-free window you lose the moment you carry a balance past your due date), and your CIBIL score (the three-digit number lenders use to judge your creditworthiness). Nearly every other term on this page ultimately feeds into how these three behave.
How Billing Cycle, Due Date and Grace Period Fit Together
Your billing cycle is the roughly 30-day window during which your purchases are tallied into one statement. Your due date is typically 15–20 days after that cycle ends — the deadline to pay at least the minimum amount due. The grace period is the combined stretch from your purchase date to your due date, and it's interest-free only if you paid your previous statement in full; carry any balance forward, and new purchases start accruing interest immediately, with no grace period at all.
APR vs Finance Charge vs Late Fee
These three are often confused but are structurally distinct. APR is the annual interest rate quoted on your card. The finance charge is the actual rupee amount of interest applied to your account in a given cycle, calculated from that APR. The late payment fee is a separate, flat, one-time penalty charged specifically for missing your due date — it has nothing to do with interest and is charged in addition to it. Our Late Fee Calculator estimates both components separately for exactly this reason.
How to Use This Glossary Alongside Card Comparisons
When you're comparing two cards side by side, the specific numbers behind terms like annual fee, joining fee, and foreign transaction fee are what actually differentiate otherwise similar-looking cards. Use this glossary to understand what each term means in principle, then check each card's individual detail page for its specific values — that combination is what turns a comparison from guesswork into an informed decision.