Credit Card Glossary

Letter Z

Z Score

A bankruptcy prediction model that is computed by assigning values to five financial ratios. Introduced by the famous NYU professor, Edward Altman, the Z score sets the bar for projecting whether a firm will go bankrupt.

Zero Balance

When there is no debt on a credit card account, whether that be because it is unused or the balance has been paid in full. If a card is dormant, and it does not contain an annual fee, there is no real reason to close a credit card account with a zero balance as you may need you credit line in the future for an unexpected expense and closing accounts may negatively impact your credit score.

Zero Liability Policy

A zero liability policy is a trending practice employed by most major credit card issuers that protect consumers from unauthorized purchases made with their credit cards. Federal law requires a limit of $50 but the trend, especially with rising cases of identity theft, is for banks to absorb the full cost of fraudulent purchases.

Zero Percent

The written-out method of saying 0%. As it applies to the credit card industry, many issuers in an attempt to attract new clients offer teaser rates on balance transfers and purchases with zero percent introductory terms.

Zip Zap Machine

This is the exact same thing as a knuckle buster, the manual impression based credit card reader that uses carbon paper packets to create impressions of credit card numbers to create receipts. A zip zap machine works by inserting a card and the carbon paper packet into the device. There is then a sliding mechanism that rubs the embossed credit card number into the paper creating several receipts that are given to the customer, merchant, and processing company.

Zombie Debts

Debts that remain uncollected past the statute of limitations. Zombie debts are not enforceable by courts, however there are now specialized collection agencies that are taking on zombie debts at a very low cost.