Credit Card Rewards Glossary

0% intro APR

A promotional period, often 12 to 21 months, where a card charges no interest on purchases or balance transfers. Interest resumes at the regular APR after it ends.

5/24 rule

A Chase guideline that often declines applicants who have opened five or more cards from any issuer in the past 24 months.

Amex family rule

An American Express policy that groups related cards into families and limits welcome bonuses within each. On the Membership Rewards family (Green, Gold, Platinum), you can earn a card bonus only if you have never held a more premium card in that family, so you apply from the bottom up. Stacks on top of the once-per-lifetime rule.

Anniversary bonus

A perk some cards give each year you keep the card, such as bonus points or a free hotel night, which can offset the annual fee.

Annual fee

A yearly charge for holding a card. Worth paying only when rewards and credits you will use exceed the fee.

Annual percentage rate (APR)

The yearly interest rate charged on a balance you do not pay in full. Rewards never outweigh APR, so pay the statement balance every month.

Application velocity

How many cards you have applied for in a short span. Too many in a few months can trigger denials regardless of your score.

Authorized user

Someone you add to your account who gets a card on your credit line. Can help them build credit and can earn you extra rewards.

Average age of accounts

The average age of all your credit lines, a scoring factor. Keeping old cards open, even unused no-fee ones, helps it.

Award chart

A published table of how many points or miles an award costs. Many programs have replaced fixed charts with dynamic pricing.

Award travel

Flights or hotel stays booked with points or miles instead of cash, usually the highest-value way to redeem transferable points.

Balance transfer

Moving debt from one card to another, usually to a card with a 0% intro APR, to pay it down without interest. A transfer fee of 3 to 5 percent usually applies.

Base rate

The rewards rate a card earns on purchases outside its bonus categories, often 1x or 1.5x.

Billing cycle

The roughly monthly period a card tracks purchases before issuing a statement. Spending posts to the cycle in which it occurs.

Bonus category

A type of spending, such as dining or groceries, where a card earns an elevated rate.

Cardholder agreement

The contract that governs your card, including the APR, fees, grace period, and dispute rights. Worth skimming when you open a card.

Cash advance

Borrowing cash against your credit line. It carries a high APR with no grace period and a fee, so avoid it.

Cash back

Rewards paid as a statement credit or deposit, always worth their face value.

Charge card

A card with no preset spending limit that must be paid in full each month rather than carrying a balance.

Chargeback

A reversal of a charge initiated by your card issuer when you dispute a transaction you did not authorize or that went wrong.

Co-applicant

A second person who applies with you and shares responsibility for the account. Uncommon now, since most issuers prefer authorized users.

Cobranded card

A card tied to a specific airline or hotel brand. Rewards are usually locked to that brand.

Companion fare

A benefit, common on airline cards, that lets a second traveler fly for a reduced rate when booked with the cardholder.

Credit bureau

One of the three companies, Equifax, Experian, and TransUnion, that compile your credit reports. Issuers pull from one or more when you apply.

Credit limit

The maximum balance an issuer lets you carry on a card. Higher limits help keep your utilization low.

Credit mix

The variety of credit types you hold, such as cards, a car loan, and a mortgage. A modest scoring factor that rewards variety.

Credit report

A detailed record of your credit accounts and payment history from a bureau. You can check yours free at AnnualCreditReport.com.

Credit score

A number, usually a FICO between 300 and 850, that summarizes your credit risk. Payment history and utilization matter most.

Credit utilization

The share of your available credit you are using. Keeping it low, generally under 30 percent, helps your score.

Deferred interest

A store-card trap where interest is waived only if you pay the full balance by a deadline; miss it and you owe interest back to the purchase date. Different from a true 0% intro APR.

Devaluation

When a program raises the points needed for awards or cuts a benefit, lowering the value of points you already hold.

Dynamic pricing

Award costs that rise and fall with cash prices and demand instead of a fixed chart, common with airline and hotel points.

Earner card

A card, often with no annual fee, that earns points cheaply but cannot transfer to partners on its own. Pair it with a hub card.

Elite status

A loyalty tier that unlocks perks like upgrades, free nights, or lounge access. Some cards grant it automatically.

Extended warranty

A card benefit that lengthens a manufacturer warranty on eligible purchases at no extra cost.

FICO score

The most widely used credit score model. Most card approvals reference a FICO score from one or more bureaus.

First year free

An offer that waives a card annual fee for the first year only. Re-evaluate before year two, when the fee kicks in.

Foreign transaction fee

A surcharge, often around 3 percent, on purchases made outside your home country. The best travel cards waive it.

Free night award

A hotel-card benefit giving one free night each year, often capped at a points value, that can offset the annual fee.

Grace period

The window between your statement closing date and due date. Pay in full within it and you owe no interest on purchases.

Hard inquiry

A credit check from a new application that can lower your score a few points for several months.

Hub card

A premium card that unlocks transfers to airline and hotel partners for an entire family of cards.

Issuer

The bank that issues a card and lends the money, such as Chase or American Express, as opposed to the network that processes payments.

Late fee

A charge for missing your payment due date, often up to about $40. A single late payment can also trigger a penalty APR and hurt your score.

Lounge access

Entry to airport lounges, often via Priority Pass or an issuer network, included on many premium travel cards.

Loyalty program

An airline or hotel rewards program, like World of Hyatt or Delta SkyMiles, that your card points may transfer into.

Miles

A points currency, either flexible bank miles like Capital One, or airline miles tied to one carrier.

Minimum payment

The smallest amount you can pay to stay current. Paying only the minimum means costly interest, so pay in full.

Minimum spend

The amount you must charge in an opening window to earn a welcome bonus, such as $4,000 in three months.

Mobile wallet

Paying with a phone or watch via Apple Pay, Google Pay, or Samsung Pay. Some cards earn bonus rewards on mobile-wallet spend.

Network

The payment system that processes a card: Visa, Mastercard, American Express, or Discover. It affects where the card is accepted.

Over-limit fee

A fee for spending past your credit limit. Rare today, since most issuers decline the transaction instead and you must opt in to over-limit spending.

Pay over time

An option to carry certain charges and pay them in installments with interest or a fixed fee, such as Amex Plan It. Convenient, but it is still borrowing.

Penalty APR

A higher interest rate an issuer can apply after a late payment, sometimes around 30 percent.

Points valuation

The cash value assigned to a point. Cardocrat uses a flat 1 cent per point so cards compare honestly.

Pooling points

Moving points from several cards in the same program onto one account, often a hub card, so you can transfer or redeem them together.

Pre-qualification

A soft-inquiry check of your likely approval odds for a card that does not affect your credit score.

Product change

Switching your existing card to a different one from the same issuer without a new application, often to drop or add an annual fee.

Purchase protection

A card benefit that reimburses you if an eligible new purchase is damaged or stolen within a set window.

Reconsideration line

A phone line where you can ask an issuer to review a denied or pending application, sometimes turning a no into an approval.

Redemption

How you cash in rewards: statement credit, travel booking, gift card, or a transfer to a partner.

Retention offer

A statement credit or points a card issuer may give to keep you from canceling, usually requested by phone.

Returned payment fee

A charge when a payment to your card bounces, similar in size to a late fee. Keep enough in your account to cover autopay.

Revolving credit

Credit you can borrow, repay, and borrow again up to a limit, like a credit card. Carrying a revolving balance accrues interest.

Rotating categories

Bonus categories that change each quarter and must be activated to earn the elevated rate, as on the Chase Freedom Flex and Discover it.

Schumer box

The standardized table on a card offer that lists the APR, fees, and key terms in a consistent format so you can compare cards.

Secured card

A starter card backed by a refundable cash deposit that sets the credit limit, used to build or rebuild credit.

Soft inquiry

A credit check, such as pre-qualification or your own score check, that does not affect your score.

Statement balance

The amount you owed at the end of your last billing cycle. Pay this in full by the due date to avoid interest.

Statement closing date

The day your billing cycle ends and your statement is generated. The balance reported to the bureaus is usually the one on this date.

Statement credit

A reward or perk applied as a reduction on your bill, such as an annual travel credit.

Sub-prime card

A card aimed at poor credit, often with high fees and a low limit. A secured card is usually a cheaper way to rebuild.

Tradeline

Any credit account that appears on your credit report, such as a card or loan. Becoming an authorized user adds that tradeline to your report.

Transfer bonus

A limited-time promotion giving extra points when you move them to a specific partner, such as 30 percent more.

Transfer partner

An airline or hotel program that accepts points from a bank rewards program.

Transfer ratio

How many partner miles you get per point transferred, usually 1 to 1 but sometimes higher or lower.

Transferable points

Bank points you can move 1 to 1 into airline and hotel programs, where they can be worth more than 1 cent each.

Travel insurance

Card protections such as trip delay, trip cancellation, and rental car coverage when you pay with the card.

Trifecta

A popular three-card setup from one issuer, like the Chase Trifecta, that pairs no-fee earners with a transfer hub to maximize points.

Variable APR

An interest rate that moves with a benchmark like the prime rate, so it can rise or fall over time. Almost all card APRs are variable.

Welcome bonus

A one-time reward for meeting a minimum spend as a new cardholder. Also called a sign-up bonus.