Letter F - Credit Card Glossary
Fair and Accurate Credit Transactions Act
A law enacted in 2003 that allows consumer's to obtain their credit reports from the three major credit bureaus once a year, free of charge. The Fair and Accurate Credit Transactions Act was responsible for the collaborative effort, annualcreditreport.com, which provide the service. In addition, the FACTA allows consumers to place an alert on their report(s) if they suspect they have been victim to fraud.
A consumer protection piece of legislation that prevents an issuer from holding a consumer liable for unauthorized charges on their credit card account. These include undelivered goods or services and other disputed charges. Each issuer will typically have a department assigned to deal with these issues and the law applies to credit cards as well as charge cards and pretty much all bank cards.
Fair Credit Reporting Act
A piece of legislation enacted to establish guidelines for how a credit bureau maintains, fixes, and shares information on a consumer's credit report. The Fair and Accurate Credit Transactions Act, through annualcreditreport.com or via mail, was a measure amended to the Fair Credit Reporting Act back in 2003. (See Above)
The former name of the company FICO, that created the credit score FICO. Originally, called Fair Isaac, the company rebranded, or rather changed their name to FICO late last decade.
A credit score that isn't a FICO score, meaning one that operates under a different umbrella or criteria for calculation.
Federal Deposit Insurance Corporation
The FDIC is a government agency that insures certificates of deposits, savings and checking accounts to banks in its membership.
Federal Funds Rate
An interest rate implemented by the Fed's Open Market Committee. In short, it's the rate at which financial institutions loan each other money overnight and has a direct impact on those consumers who are carrying credit card accounts with variable interest rates.
Federal Open Market Committee
The FOMC is a branch of the Federal Reserve Board that has 12 members and meets eight times a year, unless an emergency meeting is called. They set the Federal Funds Rate as explained above which is approximately 3 points below the prime rate (most variable rate interest cards are tied to the prime rate).
Federal Reserve Board
Federal Trade Commission
The government agency that regulates and is responsible for competition and consumer protection, also referred to as the FTC in most circles (its acronym).
Fee Harvesting Cards
Credit cards issued to the sub-prime market that come strapped with, in our opinion, excessive fees. The fees include set-up, activation, and annual in most cases and provide the desperate consumer in need of credit little breathing room. Though fee harvesting card practices have been limited by the CARD Act, there are still workarounds that predatory lenders employ. We do not list such cards on our website so if you are in the need for credit and have less than perfect or damaged credit, please visit our credit cards for people with bad credit section to view offers that are not viewed as fee harvesting cards.
A credit score provided by the company formerly know as Fair Isaac, now known as FICO that is a 3 digit number that rates one's risk. A FICO score can be as low as 300 or as high as 850. Favorable interest rates on loans and credit card products are directly related to FICO scores.
A finance charge is defined as the cost of borrowing and can be expressed via the following formula and calculated in a dollar amount:
finance charge = fees interest
An extension of a finance charge defined as the amounts billed when a statement is not paid in full at the end of a billing cycle.
An APR that does not change throughout the course of a year.
Business credit cards that focus on on vehicular costs such as gas, travel expenses, etc. They were designed primarily for corporations with truckers or other employees who perform everyday duties in their vehicles and are used widely to track spending and expenses of such employees.
The period of time in between when a purchase or other transaction occurs on a credit card account and when it posts to that account.
A floor is the minimum APR that an issuer will charge for a variable rate credit card. For example, a card that is variable 11.99-23.99% has a floor of 11.99%. Floors have been outlawed due to provisions in the CARD Act of 2009.
A generous practice of some credit card companies that allow consumers to postpone payments for a designated time period if they have become overstretched. Forbearance does not forgive debt, it allows a lower rate or postponement of making monthly payments for a designated period.
Foreign Transaction Fee
A foreign transaction fee is one that's assessed when you use a US issued credit card in another country. The typical fee is 3% of all purchases but some cards come with foreign transaction fees (sometimes called foreign exchange fees) of up to 5%. If you plan on bringing a credit card when you travel abroad for use as an alternative to local currency or travelers's checks, it is extremely useful to know this information which can be found in your credit card contract or terms and conditions.
When fraudulent activity has happened or is potentially expected, a fraud may be placed on a consumer's credit report or card account by the issuer or the consumer himself.
An unauthorized purchase or other transaction, including an authorization or application facilitated on a cardholder's account.
An individual who performs a transaction with a credit card account who is neither the cardholder, additional cardholder, or authorized user on the the account.
A complete package of stolen information used to commit bank or in this case credit card fraud. Fulls include everything from personally identifiable information, to passwords, to password recovery questions, etc. Fulls are usually sold on the black market or in carding forums where criminals who engage in this activity and would find this information of use congregate.
After an acquirer receives the payment from the issuer during the purchase transaction process (minus the interchange fees), the acquirer sends the remainder after subtracting its discount fee to the merchant. The merchant is paid and the customer or cardholder is charged. This is the last step in the credit card processing chain.