Credit Card Glossary

Letter D

Data Breach

When carders or other thieves gain access to the credit card information from unsuspecting cardholders. Data breaches could rsult in identity theft or fraud.

Deadbeat

The internal term used to describe cardholders who pay off their balances every month without accruing interest. This type of consumer is usually financially stable and is using their credit card as a means to earn rewards.

Debit

A charge to an account, usually in the case of bank accounts through a check card, check or debit card issued by the banking institution. Types of debits include a withdrawal or purchase.

Debit Card

A prepaid or check card issued by a financial institution. When used, debit cards usually require a PIN number to be entered, and in some cases require a signature as well.

Debt

A credit card debt is the money owed to a bank or lender that has been facilitated by either a purchase on the card to a merchant, a balance transfer, or a cash advance. Credit card debts accrue interest if not paid in full at the end of each billing cycle.

Debt Consolidation

When a loan or group of loans is moved to one single loan with a lower interest rate. It allows a consumer to focus on chipping away at their balance while lessening monthly interest. The most common forms of debt consolidation as they relate to the credit card industry are balance transfers and in some cases promotional courtesy checks (when they offer promotional interest rates).

Debt Management Plan

An Agreement between a creditor, debtor, and counseling firm. The debtor will make payments to the firm. The firm will then take those payments and send them to the creditors.

Debt Negotiation

A settlement with creditors usually for a lower amount.

Debt to Income Ratio

The ratio of personal debt to income. This comes into play especially when looking for a large loan such as a mortgage and a high ratio can result in less than favorable terms and in many cases, denial for the loan.

Debt to Limit Ratio

Most commonly used to calculate credit scores, a debt to limit ratio analyzes the amount of debt via their credit line to the amount available. The lower the ratio, the better as it applies to your credit score.

Debtor

In the credit card world, the person who has opened a credit card account and is legally obligated to pay purchases/debt on their account.

Default

When an individual does not make a payment by the due date. It's very important not to go into default as it may result in bumping you up to the penalty rate and/or trigger fees to your account. Worst case scenario, credit lines may be lowered and legal action may be taken to recoup the debt.

Default APR

In the example listed above, failure to make a timely payment may trigger the default APR, which is a much higher interest rate in most cases than the one a consumer typically has attached to their account.

Deferred Interest

When you don't have to pay interest that has been accruing until a certain date. At that designated date, interest that has been accruing on the account is charged. You typically will see this in the retail industry.

Deficiency Judgment

The legal document requiring a person who has defaulted on their mortgage forcing foreclosure when the value is less than the loan itself. It is signed by a judge and is calculated as follows: deficiency judgment = market value of the house - amount owed

Delinquent Account

Any account past due. As it relates to credit cards, an account is usually not reported delinquent unless it is 30 days past due, meaning the minimum payment has not been made during this time.

Direct Mail

The most common facilitation of new credit card accounts typically through notifications of pre-approved credit card offer invitations. Direct mail is also how most credit cards are delivered to new and existing cardholders.

Discharge

When a judge determines that an individual does not have to pay a debt. A judge grants a discharge during bankruptcy proceedings and rids the consumer of debt.

Discount Rate

The fee charged to merchants for accepting credit cards. It usually runs between 2-3% and American Express has a history of charging higher rates, which is why in the past many merchants have elected not to accept American Express credit cards.

Discover Card

The initiator of the cash back rewards credit card program that acts both as a bank and a network. The Discover brand was introduced in 1986 and is the youngest of major payment brands - Visa, MasterCard, and American Express.

Distributor

Store branded cards and prepaid cards are issued or sold by distributors, the issuer themselves.

Dormancy fee

A no longer used tactic by some issuers where they charged fees to accounts when they were not actively used, meaning no transactions were processed or purchases made, during a certain time period. These were banned when the CARD Act's rules were implemented.

Dormant Account

See above. When no activity is made on a credit card account, it is deemed dormant.

Double Cycle Billing

Applying interest to two full cycles of billing. Commonly known as two cycle billing, it has been eliminated and deemed illegal per the terms of the CARD Act (see link above).

Drop

The location or physical address that carders use to have goods purchased illegally with the accounts that they have compromised.

Due Date

The date when a minimum payment to a credit card is due and needs to be posted by. The due date for an account may be accessed on the cardholder's statement or in cases when their is an online account management suite, via that interface.

Dump

A copy of the account information stored electronically which has been obtained via thieves and carders for stolen accounts. It is a copy of the magnetic strip on a credit card.