Cards and money

Terms on this topic

• 5/24 rule: The 5/24 rule is a US issuer policy: an applicant who has opened five or more card accounts in the past 24 months is declined for certain cards.
• Airport taxes and charges: Airport taxes and charges are government and airport levies contained in the ticket price and passed on to third parties.
• Annual fee: An annual fee is the fixed yearly price of holding a card, charged regardless of how much is spent on it or which benefits are used.
• APR: APR is the price of borrowing on a card account, expressed as an annual percentage rate.
• Authorisation hold: An authorisation hold is an amount blocked on a card account that hotels and car rental firms use to secure a later payment.
• Authorized user: An authorized user is a second person given a card on someone else's account, whose spending the primary cardholder is liable for.
• Bonus category: A bonus category is an area of spending where a card credits more points per unit of spend than its base rate, such as travel or restaurants.
• Card fraud: Card fraud is a payment made without the cardholder's authorisation, for example using stolen card details.
• Carrying a balance: Carrying a balance means leaving part of a card bill unpaid so that it rolls into the next month and accrues interest.
• Cash advance: A cash advance is withdrawing cash on a credit card, which counts as borrowing and therefore carries its own fees and interest rules.
• Churning: Churning is the repeated opening and closing of card accounts with the aim of collecting welcome bonuses more than once.
• City tax: City tax is a municipal levy per overnight stay that the hotel collects and passes on to the local authority.
• Co-branded card: A co-branded card is a credit card issued by a bank together with an airline or hotel chain that earns directly in that programme's currency.
• Collision damage waiver: A collision damage waiver is the rental company's promise not to pursue the renter for damage to the vehicle, usually subject to a deductible.
• Credit inquiry: A credit inquiry is a lender's check of a credit file; a hard inquiry is recorded and visible to others, while a soft inquiry is not.
• Credit limit: A credit limit is the maximum balance a card account may carry between statements.
• Credit score: A credit score is a number a bureau uses to express how likely a person is to meet their payment obligations.
• Credit utilization: Credit utilization is the ratio between the balance on a card and its credit limit, expressed as a percentage.
• Deductible: A deductible is the amount the insured person pays on every claim before the insurer covers the remainder.
• Dynamic currency conversion: Dynamic currency conversion is the offer to settle a payment abroad in your own home currency, with the merchant side choosing the exchange rate.
• Foreign transaction fee: A foreign transaction fee is a percentage charge added by the card issuer on purchases that are not in the card's billing currency.
• Interbank rate: The interbank rate is the exchange rate banks trade at with each other, and it serves as the benchmark against which any markup abroad is measured.
• Interchange fee: An interchange fee is the share of a card payment that the merchant's bank pays to the card issuer, and it is what funds points programmes.
• Losing points when closing a card: Losing points when closing a card describes the forfeiture of a balance held in the issuer's own programme as soon as the account is shut.
• Merchant category code: A merchant category code is the four-digit code a card network uses to classify a business, and it decides which bonus points a purchase earns.
• Merchant of record: The merchant of record is the party that appears on the card statement and is therefore the legal counterparty to the payment.
• Minimum spend: Minimum spend is the amount that must be charged to a new card within a defined period before the welcome bonus is credited.
• Once-per-lifetime rule: A once-per-lifetime rule is a condition stating that a given card's welcome bonus can be earned only a single time per person.
• Pre-existing condition: A pre-existing condition is a health issue that existed before cover started or before departure and can limit what a policy pays.
• Primary coverage: Primary coverage means a card's insurance pays first in a claim; secondary coverage only pays what another policy has not already covered.
• Product change: A product change is swapping an existing card for a different one from the same issuer without closing the account and reapplying.
• Resort fee: A resort fee is a mandatory daily hotel charge for bundled amenities, added on top of the room rate that was displayed.
• Retroactive credit: A retroactive credit is the later posting of points or miles for a stay or flight that did not appear in the account in the first place.
• Service fee: A service fee is the intermediary's own charge for making the booking, added on top of the fare or room rate and not passed to the provider.
• Shopping portal: A shopping portal is a programme-run page used to start an online purchase so that points are credited on top of what the card itself earns.
• Statement credit: A statement credit is an amount the card issuer refunds against qualifying purchases instead of awarding points for them.
• Travel medical insurance: Travel medical insurance covers medical treatment abroad, including repatriation, which state health systems usually do not pay for.
• Trip delay insurance: Trip delay insurance is a card benefit that reimburses necessary extra costs during a long delay or an interrupted trip, such as hotels and meals.
• Welcome bonus: A welcome bonus is a one-off points credit for opening a new card and meeting a minimum spending requirement within a set period.