A quick guide to credit card mumbo jumbo
The foreign, exotic land that is New Zealand’s financial sector is chock-a-block with all sorts of monetary jargon that you may or may not be familiar with. Here are some of the most common terms you might come across:
Annual fee – The yearly fee your bank charges you to use a credit card. This can vary between banks and cards, so always compare credit cards in New Zealand before committing.
Balance – In the context of credit cards, this refers to the amount of money owed.
Billing cycle – The sweet, sweet period of time between receiving your credit card bills. Typically about 28 days.
Cash advance – A cash loan from your credit card. Be aware that a cash advance usually comes with fees and immediate interest. Use cautiously.
Cash back – Some credit cards offer you cash back equal to a percentage of the amount of money you’ve spent on your card within a certain timeframe. Excellent feature, if used wisely.
Chargeback – Reversal of a transaction, usually because you’re unhappy with a product or service you’ve purchased.
Chip card – Credit card featuring microchip technology.
Credit Limit – The maximum amount of money that can be charged to your credit card account. Talk to your bank about increasing or decreasing this value.
Interest rate – The annual interest charged on your unpaid credit card balance.
Minimum payment – The minimum amount of money you are required to pay on your credit card bill each month.
Rewards – Incentives provided by credit card issuers that are given when the card is used. Typically come in the form of redeemable points, Airpoints or cash back.
Secured credit card – A credit card that needs collateral (often property, a vehicle, cash, etc) before it can be approved. Usually used by those with bad credit history.
If you’re looking for a new (or first) credit card, remember to compare credit cards to ensure you’re getting the best deal that suits your needs
Happy comparing, and saving.