Provident Credit Union: Creating Good Credit

Click on one of these common credit and credit card related terms for a "plain English" explanation:

Annual Fee: A yearly fee charged to a customer to participate in an open-ended credit program. Provident Credit Union does not have Annual Fees on its Visa cards.Back to Top
APR (Annual Percentage Rate): The cost of credit expressed as a yearly rate. APR is a percentage that results from an equation considering the amount financed, the finance charges, and the term of the loan. Back to Top
Authorized User: A person who has been given permission to make charges on a credit account. This status must be given by the primary account user. An authorized user is not legally responsible for repaying the account. Back to Top
Average Daily Balance: The balance that results from adding together all the daily balances of a credit account in the billing cycle and dividing by the number of days in the billing cycle. Provident Credit Union uses this balance on your Visa to calculate finance charges. Back to Top
Balance: For credit cards, balance refers to the amount owed. Back to Top
Balance Transfer: The transfer of debt from one or more source to another, balance transfers are often used to consolidate several higher interest card balances onto one lower interest card. Back to Top
Balance Transfer Fee: The fee charged to transfer balances between two credit sources. This fee is often a percentage of the amount transferred. Provident Credit Union may charge a Balance Transfer Fee for balance transfers. Please refer to your disclosure or promotional offering. Back to Top
Bank Identification Number (BIN): The first six digits of a Visa or MasterCard account number. This number is used to identify the card issuing institution. Back to Top
Billing Cycle: The period of time that a credit statement covers. Back to Top
Billing Statement: The summary of all transactions applied to a credit account during a billing cycle. These can include payments, purchases, finances charges, fees and other transactions. Back to Top
Card Issuer: Any bank, credit union, or company that issues, or causes to be issued, plastic cards to cardholders. Back to Top
Cardholder: An individual to whom a card is issued, or who is authorized to use an issued card. Back to Top
Cardholder Agreement: The written statement that defines and explains all legal terms for a credit card agreement. It includes payment terms, billing dispute procedures and communications guidelines, among other items. Back to Top
Cash Advance Fee: A fee assessed when a cardholder uses a credit card to obtain cash. These fees are often charged as a percentage of the cash obtained. Back to Top
Cash Advance: A process of receiving cash or a check from your credit card issuer. The amount received is placed on your account as a separate outstanding balance and is subject to interest charges. Since the advance is really a loan, interest is charged from the date of the advance. Issuers other than Provident typically charge a higher rate for cash advances. Payments made are usually applied to reduce the portion of your outstanding balance with the lowest interest first. Back to Top
Check Card: Also called a debit card, this is a type of Visa card that can replace cash or checks in your pocket, wallet, or purse. It can be used in most places that accept Visa cards, but transactions are deducted from your checking account either immediately or within one to three days. Besides being able to use it by signing your name (as with any Visa), it also functions as an ATM (Automated Teller Machine) card and can be used with a PIN (Personal Identification Number) at POS (Point Of Sale) terminals. Back to Top
Credit: In business, the ability to buy or borrow based on the promise to repay at a later date. In any credit arrangement there is a creditor (a person, credit union, bank, store, or company to whom money is owed) and a debtor (the person who owes money). Back to Top
Credit Bureau: An agency that checks credit information and keeps a complete file on people who apply for and use credit. Back to Top
Credit Card: A plastic card that gives access to a line of credit. Users are limited in how much they can charge, but they are not required to repay the full amount each month. Instead the balance accrues interest with only a minimum payment due. Back to Top
Credit Card Number: Unique 16-digit number assigned to credit card, usually shown in raised letters on the front of the card. Back to Top
Credit Insurance: A coverage that pays credit card debt in the event of death, disability, or loss of employment, up to predetermined limits. Back to Top
Credit Limit: The maximum amount of money a borrower can access in a credit account. Back to Top
Credit Report: A historical report on the type, amount, frequency, and repayment of credit used by consumers and businesses. This usually plays a very large part in the decision to grant credit to a consumer.Under the FACT Act amendments to the Fair Credit Reporting Act, consumers are entitled to see one free copy of their credit report in a 12 month period. You can request to see yours online by going to annualcreditreport.com Back to Top
Debit: A bookkeeping term for a sum of money owed by an individual or institution; a charge deducted from an account. Back to Top
Debit Card: Also called a check card, this is a type of Visa card that can replace cash or checks in your pocket, wallet, or purse. It can be used in most places that accept Visa cards, but transactions are deducted from your checking account either immediately or within one to three days. Besides being able to use it by signing your name (as with any Visa), it also functions as an ATM (Automated Teller Machine) card and can be used with a PIN (Personal Identification Number) at POS (Point Of Sale) terminals. Back to Top
Default: A status assigned to a cardholder if he or she fails to perform or conform to all the items listed in the cardholder agreement. Back to Top
Expired Card: A card on which the embossed, encoded, or printed expiration date has passed, making the card no longer valid. Back to Top
FICO Score: Credit bureau scores are often called "FICO scores" because most credit bureau scores used in the US are produced from software developed by Fair Isaac Corporation (FICO). That score is calculated by a mathematical equation that evaluates many types of information that are in your credit report. By comparing this information to the patterns in millions of past credit reports, the score identifies your level of future credit risk.

While FICO scores are numbers used for comparison purposes, much more comprehensive credit reports are also used to determine credit worthiness. Back to Top
Finance Charge: The charge on a credit card statement which represents the dollar amount of the interest charged for the use of money. Back to Top
Fixed Rate: An interest rate that does not change over time. Back to Top
Foreign Transaction Fee: A fee that many card issuers charge for converting another country's currency to U.S. dollars when using a credit card. Provident Credit Union may charge this fee. Please refer to your account disclosure. Back to Top
Grace Period: The length of time between the use of credit to make a purchase and the start of interest on the amount charged. With Provident Credit Union Visa cards, the grace period extends the full 25 days from the billing cycle closing date until the due date to repay your balance for purchases before a finance charge on purchases will be imposed. Back to Top
Index: A published interest rate that is used to determine the actual rate charged with a variable interest rate account. The prime rate, published in the Wall Street Journal, is often used as the index. Back to Top
Interest: The fee paid for the use of money. For credit cards, the interest is expressed as a finance charge. Interest may be paid, for example, by an individual to a bank for credit card use. Interest is expressed in terms of annual percentage rate (APR). Back to Top
Introductory Rate: A temporarily low interest rate, used as incentive to encourage people to become new cardholders. After the introductory period, the rate will increase to the standard percentage. Provident Credit Union has special introductory rates for each of its Visa cards. Back to Top
Joint Borrower: The person who signs on a credit agreement in addition to the primary applicant. This person is legally responsible for repayment of the debt. Back to Top
Late Payment Fee: A fee charged to a consumer if his or her monthly payment is made after the due date stated on the billing statement. Provident Credit Union gives its members 7 additional days after that to make payments before the late payment fee is assessed. Back to Top
Line Of Credit: An authorized amount of credit that can be borrowed, repaid, and borrowed again. Back to Top
Minimum Payment: The smallest payment a consumer can make in a billing cycle to keep the account from going into default. Back to Top
New Balance: The balance that remains when all payments made during a billing cycle are subtracted from the balance from the previous billing cycle. This balance also includes any finance charges for the current billing cycle. Back to Top
Participation Fee: A set fee that is charged to cardholders on a monthly basis in addition to the annual fee, making the card even more expensive to carry. Provident Credit Union does not charge this extra fee on any its Visa cards, nor does it even charge an annual fee. Back to Top
Penalty Rate: A higher interest rate imposed on an account when it has lapsed into default. While many financial institutions impose a penalty rate the moment a single payment is late, Provident Credit Union does not impose a penalty rate until after two consecutive minimum payments are past due. Also, Provident's penalty rate program allows members to go back to their original rate if the account is brought current and maintained in a current status for 6 consecutive months. Back to Top
Personal Identification Number (PIN): A code that provides security for consumers at an ATM or Point Of Sale (POS) location. Back to Top
Point Of Sale (POS): A PIN based transaction with an ATM card, check card, or credit card, or the location where that transaction takes place. Back to Top
Pre-Approved: A term used to denote a credit offer that is extended after the creditor has performed a credit pre-screening process. Back to Top
Previous Balance: The balance that has carried over from the previous billing period. Back to Top
Proprietary Credit Card: A private labeled credit card typically issued by a department store or petroleum company that can only be used at those specific outlets. Back to Top
Secured Card: A credit card that is guaranteed by a security deposit so that repayment of the amount borrowed is assured. This is an option to begin to repair a bad credit history. Back to Top
Tiered: A term that applies to interest rates, where the actual rate applied depends on the balance on the account. Back to Top
Transaction: Action between a cardholder and either a merchant the card issuer that results in activity on the cardholder account. Purchases, cash advances, balance transfers, and payments are all examples of types of transactions. Back to Top
Transaction Date: The date that a purchase or payment was made or a cash advance was taken. Back to Top
Unsecured Debt: A credit source that is not guaranteed with collateral. At Provident, the maximum unsecured credit allowed per membership, including Visa and VIP Lines of Credit, is $10,000. Back to Top
Variable Rate: An interest rate that changes and is determined by adding the index rate to the previously disclosed margin. All Provident Credit Union Visa cards (with the exception of the Home Equity Line of Credit Visa Platinum) come with fixed rate financing. Back to Top
Verified by Visa: Verified by Visa is a service that protects your existing Visa card with a password you create, giving you assurance that only you can use your Visa card online (with participating merchants). For more information, visit the Verified by Visa Web site Back to Top
Visa: The Visa USA corporation and all of its subsidiaries and affiliates. Back to Top
Visa Card: A card that bears the Visa symbol, enabling a Visa cardholder to obtain goods, services, or cash from a Visa merchant. Usually refers to the Visa credit card, although technically a Visa Check Card is also a type of Visa card. Back to Top

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