Credit Card Glossary

Letter I

Identity Theft

The act of stealing personally identifiable information to commit or attempt to commit fraud. The most common cases of identity theft are when thieves or carders steal an unsuspecting consumer's information to open up a credit card account and then use it to rack up debt in the victim's name. Targets traditionally are the elderly or family members but in recent years an increasing number of cases have been exposed involving minors.

In-House

Credit cards operated and issued directly by the merchant. In-house merchants will typically have a fairly large credit department and are exclusively store credit cards, which usually aren't great deals to begin with as they typically come with much higher rates than traditional credit cards.

Inactive Account

Known also as a dormant account, it is exactly what it sounds like. Inactive accounts are credit card accounts that have not been used, meaning that no transactions have been facilitated through them. Some issuers will close these accounts after a designated time period.

Inactivity Fee

A practice that no longer exists as it is illegal where issuers would place fees on inactive or dormant credit accounts. These were implemented as a way to creatively find other ways to maximize the earnings from credit accounts but were outlawed by the CARD Act in 2010.

Index

A benchmark rate used to calculate a variable interest rate for credit cards that are tied to the prime rate. If your rate were to be prime 4 and the prime was 7.99% then your credit card rate would be 11.99%. At one point there were a few different cards that were tied to the LIBOR rate, most issued by Citi®, but these days you don't see the LIBOR come into play.

Inquiry

There are two types of inquiries performed. One is authorized and the other is not. A soft inquiry or soft pull is usually performed on a consumer's credit report to see a quick glimpse of their profile in order to determine whether or not they may be eligible for a pre-approved offer. Soft inquiries or pulls do not have an impact on one's credit score. A hard inquiry on the other hand does and is an authorization made by the consumer who is applying for a loan to allow the lender to take a deep look at their credit report.

Installment Loan

A car loan or mortgage are the two most common installment loans. Simply put, they are loans that have a fixed payment, where the consumer pays the same amount until every pay period until the loan is paid off.

Interchange Fee

The same as the discount fee which is the sum paid by merchants to processors as a fee for the ability to accept credit cards as an alternative form of payment. It varies but is typically between 2-3%.

Interest Rate

The price used to calculate the cost of a loan. As it relates to credit cards, there are multiple different types of interest rates that may appear in a credit card contract: a 0% rate (0% APR), a go-to rate (regular rate), default rate, etc. Though there are several different of these and they may vary based on the type of transaction performed with the card -- balance transfers, purchases, cash advances the calculation of interest is always the same.

Interest Rate Cap

The most amount of interest that can be charged to a consumer governed by a state government or federal law or imposed in the terms of a credit card agreement or contract in the terms and conditions.

Introductory Period

Some credit cards have introductory interest rates that are much lower than their go-to rate. The introductory APR is usually attractive to consumers as it will save them money on interest, especially if it is a 0% APR offer. The introductory period is the length of time this rate is applied. From a consumer standpoint, the longer the period or term, the more attractive the offer.

Introductory Rate

Commonly known as the introductory APR, the interest rate charge at the beginning of account opening that results in a lower interest accrual than the regular rate. The introductory rate last for a specific time period before the regular rate kicks in (see above).

Issuer

Any financial institution or bank who issues credit cards. For example, if a consumer carries a Chase Visa credit card, the issuer is Chase, not MasterCard. MasterCard is the network or processor while Chase is the issuer in this example.

Issuer ID Number

The issuer identification number is the sequence of the first six numbers on a credit card account which identify the issuer (see above). The remaining numbers in order are your specific account number.