It’s no surprise that cashback credit cards have grown in popularity in recent years. A cashback credit card is a credit card company’s reward or incentive program in which a percentage of the amount spent is reimbursed to the cardholder in the form of a credit on the card statement. The cashback system is a popular method of saving money for customers, and it benefits both the cardholder and the credit card company. Cashback is frequently offered on specific purchases such as gas, utility bills, groceries, and so on.
For example, if your card pays 2% cashback and you spend AED 100 in a store, you earn AED 2.
It is the maximum credit available on your card to borrow.
It is the maximum amount that you can withdraw from ATM using your credit card.
The total amount of interest you pay annually (before taking compound interest into account) expressed as a percentage of the loan balance is the annual percentage rate (APR) of a loan. If you pay off the entire balance of your card each month by the due date, you can typically avoid paying interest on purchases.
For instance, if a credit card has a 10% APR, you might pay about AED 100 per AED 1,000 borrowed each year.
A small percentage of total outstanding balance which a cardholder should pay on or before the due date to avoid default on payment.
It is the date by which you have to pay at least the minimum amount due is you are not able to pay the total outstanding amount.
It is the outstanding balance at the end of the last billing cycle. It excludes payment made towards the balance.
It is the fee levied on your credit card if you don’t pay the minimum due amount before the due date.
It is the duration within which you are allowed to re-pay the borrowed amount without charging any interest. There is usually 30 days grace period allowed for credit card repayments, however, it may vary for every lender.
A billing cycle also called the billing period, is the length of time between the last statement closing date and the next. It typically lasts between 28 to 31 days.
For example, if your credit card statement is generated on the 10th of every month, then your billing cycle will start from the 11th of the previous month and go on till 10th of the current month.
An over-limit fee is a fee charged when your balance goes over your credit limit.
It is the amount inclusive of interest costs and transaction fees that are charged on the borrowed money.
An annual fee is a yearly charge by banks and financial institutions to customers for use of their credit cards.
It is the charge levied by banks and financial institutions upon cash withdrawal from the credit card.
When an outstanding balance of one credit card is transferred to another credit card it is known as a Balance Transfer. This may incur a fee. It is usually done to lower the interest rate on the balance.