Credit card information: The basics you need to know
Key takeaways
Printed on a credit card, you'll find the card number, the cardholder’s name, when the card expires and the card's security code — all the details you need to make purchases online or in person.
To learn your credit limit, what you currently owe and the interest you’ll accumulate if you don’t pay by your due date, check your paper billing statement or online account.
It’s also important to understand the key terms you might encounter on bills, when using rewards or when performing certain kinds of transactions.
Whether you’re paying for groceries or shopping online, using a credit card is an integral part of everyday life for many people. But how well do you know and understand your credit card’s terms — and what do they even mean?
Understanding this basic information, as well as how to use your credit card, is essential if you want to get the most out of all your card has to offer while avoiding debt and mistakes detrimental to your credit. Whether you’re just starting to build credit or you’re a seasoned cardholder, this glossary can help you understand some basic terms that you may come across when using your credit card.
Credit card information
Credit cards are financial tools, and knowing how they work will help you maintain and build upon your experience while using them.
There is important information found on the card itself that you’ll be asked for when making purchases, logging into accounts or adding cards to digital wallets. Here are some of the key pieces of credit card information you may be asked to provide and where to find each one:
Information that’s printed on your credit card
How to find your account information
In addition to the identifying information found on the card itself, you should be familiar with your card’s account information. You can find your account information if you:
Look on your paper billing statement
Log into your online account
Use your card issuer’s mobile app
Call your credit card issuer and ask for specific information
This information can help you know when to make payments and redeem any rewards you may have earned, as well as keep you updated with your account balance and credit limit.
Some of your account information is reported to credit bureaus as a part of your credit report, which shows your active account history and helps determine your credit score. If you’ve never read your credit report before, you can request copies for free through the government-authorized website AnnualCreditReport.com.
The following information can help you better understand the details of your credit card account and track your credit history:
Credit limit
Your credit limit is the amount of credit you’re approved for by your card issuer. To keep your account in good standing, your balance should remain under your credit limit. It’s best practice to keep your card balance as low as possible. Using no more than 30 percent of your credit limit at a time will allow you to keep a good credit utilization ratio, which in turn can help you keep a healthy credit score.
Current balance
Your current balance is the total amount of credit you have used at the time of billing. It will include purchases, balance transfers, cash advances and convenience checks. Interest is applied to your balance if you don’t pay in full each statement cycle and may be different for various kinds of charges.
Interest rate (APR)
Your interest rate is determined by your annual percentage rate — or APR — and is added to your balance at the end of a billing cycle. It’s called an APR because it is the total annual amount you would be charged in finance charges in a year, so your actual interest rate on a given month is usually only about a twelfth of this number. You can check your billing statement to keep up with your current interest rate. It can be complicated to calculate exactly how much you’ll owe, but your statement should outline it clearly — or you can use a credit card payoff calculator to do the math for you.
It is important to note that when we speak about a card’s APR, we usually mean purchase APR — the interest you pay on regular purchases. However, there are other types of interest rates to be aware of, including:
Types of interest rates
Keep in mind: An APR can be variable or fixed. A variable APR is more common and changes based on the prime rate (the interest rate banks use to calculate how much to charge their most creditworthy customers). A fixed APR, on the other hand, is locked.
Important credit card terms
Understanding certain credit card terminology beyond what’s on your card statement is crucial for managing your credit cards wisely. Some of those terms include:
Balance transfer
When you move a balance from one card to another, you’re doing a balance transfer. Some cards, aptly called balance transfer credit cards, are geared toward consumers who are trying to pay down high-interest debt and are looking to maximize the value they get out of a balance transfer. These cards typically offer an introductory 0 percent APR on balance transfers, which can allow the new cardholder to pay no interest for a set time period even though the card is carrying a balance month-to-month. This is often an excellent method of debt consolidation — provided that the cardholder can pay off the debt before the end of the intro period.
Billing cycle
A billing cycle is the length of time between the last and the current statement dates. A typical billing cycle is 30 days. According to the Credit Card Accountability Responsibility and Disclosure Act— more commonly called the CARD Act — your due date must be at least 21 days from the end of the billing cycle.
Cash advance
Not all transactions on your credit card are treated equally. For example, you have an option to withdraw cash from your credit card, but this type of withdrawal will be considered a cash advance. A cash advance begins accruing interest immediately and has its own terms, APR and fees. Cash advances also typically come with steep interest rates.
Grace period
The period between the end of a billing cycle and the payment due date is the grace period. During this time, an issuer doesn’t charge you interest. If you pay off your balance by the due date, you’ll avoid interest charges.
Minimum payment
The minimum payment is the lowest amount that you can pay on a balance to keep your account in good standing. Paying less than the minimum amount will be reported as a missed payment to credit bureaus. Minimum payments are determined based on your current balance and interest rate.
Rewards
Rewards can come in the form of points, miles or cash back. The number of rewards you earn will depend on the bonus categories for your rewards credit card and the rewards structure.
Generally, the rewards you earn will pool together in your credit card account until you choose to redeem them. Your total rewards balance and the level of rewards available for redemption will appear on your statement.
Types of credit cards
There are many different types of credit cards available, and it’s important to understand that not all cards fit all lifestyles — and you may not qualify for a specific card, based on your credit score. You should always consider the unique factors that influence how you will use and benefit from a card before you get it. For example, do you want a card you can use for everyday spending and get rewarded with cash back? Are you a college student trying to build credit? A card decision is never one size fits all.
A few of the most common types of credit cards include:
Credit card type breakdown
Credit card fees
You’ll also come across various types of credit card fees. It’s best to get acquainted with all of them to avoid unexpected charges. We’ve compiled a list of the different types of fees below:
Types of credit card fees
The bottom line
A credit card is a useful financial tool, but it can be a danger to your financial health if you misuse it. To avoid that, make sure you understand the language that credit card issuers use to describe your card details and fees. By knowing this general credit card information and your card’s terms and conditions, you can know what to expect with each transaction and payment you make. Plus you can put yourself in a better position to get the most out of today’s best credit cards on the market.