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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.
PocketWise

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