The account holder is the man or woman over the age of 18 who is responsible for paying off a credit card account that has been opened. They are the ones responsible for the balance and are legally obligated to pay off the loan.

This is a term used by banks or credit card issuers to describe a newly opened account. In marketing terms it is usually used in reference to CPA (cost per acquisition) relating to how much it costs to obtain a new account.

The account holder on a credit card account may add an additional cardholder to the account. This person may make purchases with their credit card, but they are not legally obligated or responsible for the balance itself.

These are the cards issued under the primary cardholder and given to the additional cardholder for use. (see above information on additional cardholder).

A formulaic calculation used to determine monthly balances that adds finance charges while subtracting payments made to the account during a given month or billing cycle.

As it relates to credit cards, a relationship between a bank or credit card network and an institution, organization, or business that does not typically engage in lending.

A partnership or co-branded card between a bank and an organization. For example, a Marriott Rewards Card or a Southwest Airlines Card.

A major credit card network, originally an issuer of strictly charge cards. American Express issues credit cards and charge cards to consumers. They also provide small businesses the same varieties through OPEN. American Express offers are reserved for those with excellent credit.

An acronym for alternative method of payment. For our purposes, it can be a credit card, charge card, or prepaid card, but the true definition is anything as a substitute for cash -- checks, atm cards, etc.

A fee that differs from other fees. It is annual as it is charged once a year, typically on the anniversary of a credit card account. You will find them more with sub-prime offers, some rewards cards, and charge cards issued by American Express.

A periodic rate, in years past typically tied directly to the prime rate, that’s used to compute interest charges on a credit card account balance.

Simply stated, an acronym for annual percentage rate. It is also used in lingo relating to introductory rates, such as 0% APR.

The practice of taking out a 0% loan on a credit card, depositing it in a high yield savings account or other high interest bearing account. The consumer then pays just the minimum payment on the card and benefits from the interest accrued from the savings account. This practice, commonly referred to stoozing was much more lucrative between 2004-2007 when accounts with 5-6% returns were ubiquitous.

An association or in some cases referred to as a network, is a group of credit card lenders or groups (typically banks) that set the terms for transactions. These terms are set for issuers, acquirers, and merchants. The most common household names that are associations include Discover, Visa, MasterCard, and American Express.

In short, a security measure that insures that a person who is making a purchase online, offline, or over the phone is allowed to make a purchase with a credit card, meaning that they are an authorized user. In recent years with the increasing trends of v-terminal and online shopping, a CVV code (security code on the back or front of a card) is typically used during the authentication process in addition to name and address.

When a purchase is made with a credit card via manual entry, a swipe, or via a v-terminal, the preliminary approval is know as an authorization. At this point, the merchant is notified whether or not the funds are available from the cardholders account. After an authorization has been accepted, the merchant will then typically close their daily transactions, known as a batch. This is usually done on a daily basis. The merchant account provider that they use will then start the process of obtaining the funds from the cardholder's financial institution. The important thing to take away from this is that funds are technically not immediately withdrawn from an account until the batch has been closed.

When an authorization (see above) has been made, a code is generated and provided to a merchant. The code may be for an acceptance or declination for the transaction -- either way, one is generated.

A time stamp for an authorization.

An authorization only is a protective measure by merchants to make sure that the funds are available in your account. The most common use of an authorization only is when you check into a hotel and they swipe your card as an insurance measure if you are going to be clearing out your bill at the end of your stay. It is also a common practice with rental car agencies.

When you make a purchase the authorized amount is the dollar value of the item you buy, including tax. The only times you will see a discrepancy between the authorized amount and the total amount withdrawn from your account is when you add a tip at a restaurant or in the event described above where an authorization only transaction is made.

An approval when a purchase is being initiated. The opposite is a declined authorization.

An additional cardholder, or other person who is allowed to use a credit card. This person is not legally bound to the card activity when it comes to paying the balance.

An ATM is a physical machine where one may withdraw cash, make deposits, or check balances. If you have a credit card an want to withdraw cash from an ATM you usually have to set up a pin number ahead of time with your financial institution. Credit card use at ATM's will also usually result in a cash advance which in most cases come strapped with a higher interest rate.

An authorization for bill pay typically set-up in advance. If one sets up an automatic payment, when the bill is either ready or due, it will be payed using the account on file. The most common way to engage in this type of arrangement is via an online interface or by phone, but in some cases a hard form may be filled out by the consumer.

The amount of room left on a credit card account for use. The formula used to determine available credit is shown below: available credit = (credit line) - (outstanding charges)

The formula used to determine the payment due on a credit card account. The forumula used is shown below: ADB = (the sum of each day's balance) / (days in the billing cycle)