Credit Card Terms The credit card terms below defines common credit card terms and will help you get better understanding how does a credit card work. Annual Credit Card Fee – Some credit cards will have yearly fee called Annual Credit Card Fee. There are many no-fee credit cards as well. Credit Card Interest Rate – The Credit Card Interest Rate is the amount of interest charge (a percentage of the borrowed amount), which the borrower pays to the lender for a period of one year. The credit card interest rate represents the cost of borrowing on your credit card. Credit Card Balance Transfer – The credit card balance transfer is the process of transferring debt from one credit card to another. Many credit card issuers offer low introductory interest rates on balance transfer to attract new clients. Credit Card Cash Advance - Cash Advance is the act of borrowing cash on your credit card. When you withdraw cash from your credit card, the interest charges start adding up right away, as cash withdrawals do not have interest-free period. When taking cash advance you may be charged cash advance fee. Credit Card Grace Period – This is a period defined by the credit card issuer (usually 15 to 25 days), which is interest free. This is the period between the transaction date and the payment due date. Cash advances do not have a grace period. Credit Card Minimum Payment – The minimum monthly payment required by your credit card issuer. The minimum payment is usually a small percentage of the outstanding balance. Credit Card Reward Program – Some credit card issuers offer credit cards which reward the usage of the card. Usually the credit card holder accumulates point when using his/her credit card to buy goods or services. Depending on the credit card reward program these points can be redeemed for goods, cash or services. Secured Credit Card – A secured credit card is a credit card, which requires security deposit held by the credit card issuer.