GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Card Holder Agreement


Synonyms:contract, legal document, terms of use
Filed Under: financial-banking, legal-contracts
Tags: banking, contract, credit card, debit cards, legal
 

Definition of card holder agreement

card holder agreement
1. The written statement that gives the terms and conditions of a credit card account. The cardholder agreement is required by Federal Reserve regulations. It must include the Annual Percentage Rate, the monthly minimum payment formula, annual fee, if applicable, and the cardholder's rights in billing disputes. Changes in the cardholder agreement may be made, with written advance notice, at any time by the issuer.

Related Terms and Acronyms:

  • account agreement   An agreement that you sign and which lists your rights and responsibilities and the bank's rights and responsibilities for the bank account.
  • American Express Company (AMEX, AXP)   A corporation known for its credit card business.
  • credit card (CC)   A plastic card with a coded magnetic stripe that, when signed, entitles its bearer to a revolving line of credit, with a credit limit and interest rate determined by the borrower's income and credit report.
      ➥  A payment card that gives customers access to a revolving line of credit.
  • grace period   If the credit card user does not carry a balance, the grace period is the interest-free time a lender allows between the transaction date and the billing date. The standard grace period is usually between 20 and 30 days. If there is no grace period, finance charges will accrue the moment a purchase is made with the credit card. People who carry a balance on their credit cards have no grace period.
  • MasterCard (MC)   A credit card issued by MasterCard International which is distributed by many financial institutions around the world. Card holders borrow money against a credit line and pay it back with interest if the balance is carried over from month to month.
  • minimum payment   The minimum amount a cardholder must pay to keep the account from defaulting. Some card issuers set high minimums if they are uncertain of the cardholder's ability to pay. Most card issuers require a minimum payment of three to five percent of the outstanding balance.
  • penalty rate   Several percentage points higher than a card's current annual percentage rate, which goes into effect after two late payments. On some cards, a single late payment triggers a penalty rate.
  • previous balance   Some credit card issuers base finance charges on the amount owed by the account holder at the end of the previous billing cycle.
  • secured credit card   A credit card that a cardholder secures with a savings deposit to ensure payment of the outstanding balance if the cardholder defaults on payments. It is used by people new to credit, or people trying to rebuild their poor credit ratings.
  • Visa (V)   A type of credit card that is distributed by financial institutions around the world. A VISA card holder borrows money against a credit line and repays that money with interest if a balance is carried over from month to month.
      ➥  A brand of credit card.

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