Important Credit Card Merchant Services Terms
Credit cards are given out by a bank or financial institution and offer consumers a chance to borrow funds at the POS. However, merchants will charge interest based on the amount of funds that are processed. The interest rate will be based on someone's credit score. In order to track purchases, merchants provide online accounts to consumers. An online account also offers customers a chance to make payments and transfer funds from one location to another. Depending on someone's plan, they may be able to withdraw cash from an ATM machine as well. Below are some terms that will help you understand credit card lingo more.
Annual Percentage Rate (APR)- The APR is the yearly percentage rate that is charged to the card when a balance is present. The rate is applied each month to the card.
Debt Consolidation - When multiple cards have a balance with a high interest rate, the balance may be transferred to a card with a lower one to reduce the payment amount.
Fraud Alert - A fraud alert is when a credit card has been lost or stolen. The merchant will freeze the account and monitor for any activity.
Balance Transfer Fee - A balance transfer fee is when the merchant charges a fee to transfer a balance from one account to another.
Point of Sale (POS) - Anytime a payment is processed, the POS is the establishment where the transaction took place.
Service Charge - A service charge is a fee taken by a merchant for over drafting or withdrawing money from an ATM machine.
Variable Interest Rate - With a variable interest rate, the APR will change depending on the economy.