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Credit Card Glossary Of Terms



Find all credit card and banking-related terms on this glossary. For further questions about credit cards, you can also refer to BolehCompare's comprehensive Guide to Credit Cards.


3D Secure / 3Ds


This is an added layer of security that protects you from credit card fraud. Merchants using 3D secure would require an additional online authentication step every time you make an online credit card or debit card transaction.

Air miles


Also known as frequent flyer points, Air miles are rewards points that go towards mileage you can use to redeem airline tickets, airport privileges, and other travel-related offers and discounts, including accommodations and tours.

Annual fee


Sometimes also referred to as membership fee, this is the cost charged by credit card issuers for maintaining credit card accounts.

Annual percentage rate (APR)


Also referred to as the annual interest rate, the annual percentage rate is the yearly interest you pay on outstanding credit card balance.

Authorisation code


This is the code issued by the credit card provider telling merchants that your card is valid and you have funds to cover the transaction at the time when authorisation is sought.

Balance transfer


This is the process of to transferring outstanding credit card balance to another credit account that will allow you to settle outstanding balance by instalments within a specified period, at a lower interest amount. Balance transfers are usually applied to high-interest credit cards, personal loans, revolving loans, overdraft accounts, etc.

Cash advance


This feature is made available by most credit card issuers, wherein the cardholder is allowed to withdraw cash over the counter or via ATMs. The amount you withdraw is deducted from your credit limit or funds on deposits. Cash advances are subject to a certain limit.

Card not present transaction


A type of transaction wherein the cardholder is unable to physically supply the card to a merchant such as with over-the-phone, online, or mail order transactions. In such cases, bank authorisation would be sought by the merchant.

Card payment network


Card payment network providers including Visa, MasterCard, American Express, and UnionPay provide payment facilities that enable credit card issuers and banks establish financial partnerships with merchant establishments. Payment network providers charge banks and credit card issuers a fee for their services, with the exception of American Express which issues its own cards.

Cashback


A feature available to cardholders that enable them to get cash, on top of their purchase, with a debit card transaction using their credit card. Cash backs are also subject to a limit.

Credit history


This is the record of payments you have made and loans you took in the past. Credit card issuers would look at this data as a basis in determining how much of a risk they are taking in lending you money.

Credit limit/ credit line


Refers to the maximum amount you may charge on your credit card. Your card may be declined or you can be imposed a penalty if you exceed your credit card limit. Over time, you may arrange to have your credit limit increase or decrease your credit limit.

Credit score


A credit score is an indicator of risk based on statistical validation as determined by credit card providers and credit bureaus. It represents the entirety of your credit history in one numeric measure. Credit scores are subject to change depending on the latest information in your credit profile.

Dual currency credit card


Some banks in Malaysia issue dual currency credit cards, which may settle transactions in RMB (for mainland China) and RM (in Malaysia and overseas). This feature is beneficial to cardholders who frequently travel in that it helps them save on foreign exchange fees.

Finance charges


These include the fees you pay to the lender for using borrowed money. Interest may be charged as a percentage of your outstanding balance. Interest rates vary for different credit cards.

Instalment plan


Instalment plan is a feature available to some credit cards, wherein banks would settle a purchase in full and the cardholder would pay back the bank the full amount in instalments.

Interest-free period


Also called the grace period, this is the period of time, preceding the monthly due date (indicated in your credit card statement) during which no interest will be charged by the bank. After said period, credit card holder would have to pay interest on top of the amount due. The length of interest-free period varies from 20-59 days.

Introductory period


During the introductory period, banks may apply introductory interest rates to outstanding balances on your credit account.

MasterCard


MasterCard is a payment processing network that does not issue credit cards. MasterCard is accepted in establishments and merchants around the world.

Merchant


Any business establishment where you purchase products or services.

Minimum payment


This is the portion of your outstanding credit card balance that you are required to pay, with the rest of the unpaid amount being subject to interest. Interest-free periods do not usually apply when you only make a minimum payment.

Online banking


Refers to all electronic systems that enable you to access a host of banking services using the internet with a personal computer or mobile devices.

PIN


Personal identification number or PIN is the code that allows you to perform banking transactions, including cash advance withdrawals on your credit card, through ATMs. You can also make purchases without signing sales receipts using your PIN. PIN codes should not be shared to anyone.

Payment Processing Network


This is a financial network or company that mediates the exchange of money between a credit cardholder and the merchant. Popular payment processing networks include MasterCard, Visa, and American Express.

Rebates


This is a payment in the form of a discount, reduction, return, or refund for a paid service or merchandise. This is usually given as a reward for credit cardholders that frequently use a particular service, such as refueling their car at certain petrol stations.

Rewards program


Most credit cards in Malaysia offer a rewards program that enables cardholders to earn points, air miles, or cash rebates for credit card usage. Some issuers will charge you a fee to participate in the rewards program, particularly those that allow you to transfer points to frequent flyers programs.

Secured cards


This is a type of credit card that requires the cardholder to make a security deposit before being granted a credit line. Secured cards are recommended if you have little or no credit history. Over time, if you are always prompt on monthly payments, you may arrange with your bank to switch to an unsecured card.

Security code


This is the four-digit code which follows right after your card number, usually printed on the signature strip at the back of your card.

CITOS


CITOS is an internationally recognised credit monitoring institution that provides Malaysia banks with credit reports gathered from various sources. Your credit report would contain your payment history, current credit use, and application data. CITOS is not involved in the decision process for approving or rejecting credit card applications.

Visa


Visa, like MasterCard, is a payment processing network that is widely accepted around the world.

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