Letter P - Credit Card Glossary
Passbook Savings Loan
A secured loan from a bank. You essentially are paying to borrow your own money and is only really done as a means to rebuild your credit. There is really no reason to do so if the bank is not reporting the loan to the three major credit bureaus so make sure that these are in the terms and conditions of the loan before you opt to apply for one.
A sequence of letters or numbers used to verify one's right to access a specific account or a a verifiable means of proving one's identity.
Pay to Pay
Charging customers to pay their bills such as a "convenience fee" for phone payments.
Small loans taken out against a future paycheck. We do not offer payday loans on our websites as we believe that they are predatory and can cause a snowball effect where consumers who take them out push themselves further and further into debt that they cannot pay off. They also come with industry high rates.
Payment Due Date
The day that at minimum the minimum payment on an account is due. Because all months have different amounts of days in them, the payment due date may change from month to month.
The analysis of how consistent a consumer has made on-time, ahead of time, or late payments to their open loans or credit card accounts.
For prepaid store card programs, the link between the processor and retailer.
Reloadable plastic cards that take the place of paychecks or electronic direct deposits to a bank account. They are used primarily by companies who have several employees without actual bank accounts where checks can be deposited.
Also called the default rate, the penalty rate is the high interest rate charged by credit card companies when the cardholder violates their credit card contract typically by failure to make a timely payment.
Per Transaction Fees
The fees paid per transaction every time a merchant makes a "call" to a payment processing system to authorize a customer's purchase when using their credit card.
The billing statement prepared by the issuer and delivered either by mail or electronically to the cardholder that outlines all fees, purchases, finance charges, and payments for their credit card account. See also billing statement.
When a business credit card account is opened, a personal guarantee is when an officer of the corporation designates himself and is bound by contract to be liable for all debts incurred on the new credit card.
An executor, someone who resumes the affairs for another typically in the event of untimely death.
The criminal act used to describe theft of credit card or bank account information for the ultimate use of committing fraud. Common phishing scams are usually through email or phone misrepresentation.
Improving your credit rating by becoming an authorized user on an account of another who has a better credit rating than you. This practice is ideal as you reap the benefits of their good credit practices without having to be responsible for paying off debts incurred on the account.
An acronym for personal identification number which is a set of digits that are used to verify a cardholder or authorized user's identity at the point of sale.
If a thief gains access to one's PIN number (see above) and withdraws cash from either their bank account or credit card line, they are partaking in an illegal activity known as PIN cashing.
A type of credit card that is fundamentally, just a credit card. There are no cash back rewards or perks that come along with these which is why they are referred as vanilla.
A slang term for a credit card.
Point of Sale
The physical location where a credit card is used to purchase goods or services -- typically at a merchant's store.
Point of Sale Terminal
The credit card reader that a retailer or merchant uses to accept payment from potential consumers and clients. There are various different types of point of sale terminals.
The day that a cardholder's activity (purchases) are recorded and recognized by the issuing bank with which they have their account.
Updating and providing via an online interface or automated voice system all transactions to an individual credit card account.
Information obtained by a financial institution via a soft pull of an individuals credit report that identifies the consumer as meeting the base requirements at first glance to potentially be eligible for one of the offers issued by that bank.
If an individual is preapproved, they receive a preapproval notice which is sent to them per the qualifications of the term directly above that allows them to apply for a particular offer. If they elect to do so, a hard pull will be performed on their credit report to continue the application process.
Prepaid cards are not credit cards, they are typically debit or gift card that requires an uploaded payment that is deducted each time a purchase is made. Some prepaid cards come with high fees, but others, like NetSpend prepaid cards are more consumer-friendly by limiting their fee structures.
The prescreening process is identical to the preapproval process where an issuer performs a soft pull on a credit report to see whether or not a consumer meets the base criteria for a certain offer.
Primary Account Holder
The main user on a credit card account who is the primary cardholder is the one who is responsible for making the payments on the card. Any other people on the account are secondary users not responsible for debts incurred.
Primary Account Number
The number on the credit card that is also the same as the credit card account number.
A prime borrower is a person with a stellar history that's clean and typically has high FICO scores. They will usually get more favorable rates.
The credit history and FICO scores of a prime borrower that allow them eligibility for premium pricing.
The interest rate used be be the rate that banks lent to their elite or most creditworthy customers. Now it's defined as 3 percentage points above the federal funds rate that sets by the Federal Reserve. Most accounts are tied to the prime rate in some capacity such as prime margin.
Private Label Credit Card
Brand specific credit cards usually with rewards programs tailored to that particular brand. Private label cards are usually either managed by the retailer or by a third party issuer.
The date recorded where a transaction is processed by an acquiring bank.
A processor oversees or facilitates transactions and distributes the funds in pooled accounts typically in prepaid store card programs.
The owner of a prepaid store program. They are the ones in charge of developing relationships with networks, distributors, banks, and processors as well as the creation of pooled accounts.
The rate charged to purchases made with a credit card.