The Credit Card Glossary: 50 Terms, Explained Without the Jargon

Bank websites throw these terms at you without explanation. Here's what each one actually means, grouped so related terms sit together.

Fees and charges

Term	Meaning
Joining fee	One-time charge when you get the card
Annual/renewal fee	Recurring yearly charge, often waivable above a spend threshold
Forex markup	Fee (typically 1-3.5%) added on top of the exchange rate for foreign currency transactions, plus 18% GST on the markup itself
Cash advance fee	Charge for withdrawing cash on your credit card, usually 2.5-3% of the amount, minimum ₹250-500
Late payment fee	Slab-based charge if you miss the due date by more than 3 days; RBI doesn't cap the amount, only the grace period and calculation basis
Overlimit fee	Charged if you spend beyond your approved credit limit
Fuel surcharge	Fee on fuel purchases, often waived up to a cap by the card issuer
Cheque/auto-debit return fee	Charged if a payment you scheduled bounces
GST on charges	18% tax applied on top of nearly every fee listed above

How billing actually works

Term	Meaning
Billing cycle	The ~30-day window your statement covers
Statement date	The day your bill is generated
Due date	The last day to pay without penalty, typically 15-20 days after the statement date
Grace period / interest-free period	The window (up to ~45-50 days) where new purchases don't accrue interest, if you pay your full previous bill on time
Minimum amount due (MAD)	The smallest amount you must pay to avoid a late fee, usually 5% of the outstanding, though it doesn't stop interest from accruing on the rest
Total amount due	Your full outstanding balance for the cycle
Revolving credit	Carrying forward part of your bill instead of paying in full; interest accrues daily on the unpaid amount
Finance charge	The interest charged on revolved or overdue balances, commonly 3-3.75% per month
Past due	Status reported to credit bureaus once a payment is more than 3 days overdue

Credit score and reporting

Term	Meaning
CIBIL score	Credit score from TransUnion CIBIL, the bureau most Indian banks check by default, ranging 300-900
Credit utilization ratio	Your outstanding balance divided by your total credit limit, both per-card and blended across all cards
Hard enquiry	A credit check triggered when you actually apply for credit; dents your score slightly
Soft enquiry	Checking your own score; never affects it
Credit history length	Average age of all your credit accounts
Credit mix	The blend of secured (loans) and unsecured (cards) credit you hold
AIS / Form 26AS	Tax documents that increasingly capture high-value card spending and can flag mismatches with declared income

Rewards and redemption

Term	Meaning
Reward rate	How much you earn per ₹100 spent, in points or percentage cashback
Guaranteed vs. max rate	The base rate you always get vs. the best-case rate under specific conditions (a platform, a spend threshold)
Milestone benefit	A bonus (points, vouchers, fee waiver) triggered by crossing an annual or quarterly spend threshold
Accelerated category	A spend category (dining, travel, groceries) that earns a higher-than-base rate
Point value	What each reward point is actually worth when redeemed, since "1 point" means different things on different cards
Co-brand card	A card issued jointly with a specific brand (an airline, an e-commerce platform), with accelerated rewards on that brand
Statement credit	Redeeming rewards as a direct reduction to your bill, instead of points or vouchers

Card types and structure

Term	Meaning
Lifetime free (LTF) card	No joining or annual fee, ever, not just waived conditionally
FD-backed / secured card	A card issued against a fixed deposit you hold with the bank, common for building first-time credit history
Add-on card	A supplementary card issued on your account for a family member, usage reports against the primary account, not a separate credit history
Metal card	A physical premium card variant, usually signaling a higher-tier product with richer benefits
Virtual card	A card that exists only digitally, often issued instantly for online use before the physical card arrives
Corporate/business card	Issued to a business entity or for business expenses, distinct from a personal card even if used by the same individual

Security and transactions

Term	Meaning
Tokenization	RBI-mandated system (since October 2022) that replaces your actual card number with a random token for online and app-based transactions, so merchants never store your real card details
CVV	The 3-digit security code on your card, required for most online transactions
Zero liability	RBI rule: if you report an unauthorized transaction within 3 working days, you owe nothing, provided the fault isn't yours
Chargeback	A reversal of a transaction initiated through your bank, typically for a failed, fraudulent, or disputed purchase
Dynamic Currency Conversion (DCC)	When a foreign merchant offers to bill you in INR instead of local currency; almost always a worse rate than letting your card network convert it
EMI conversion	Converting a large purchase into fixed monthly instalments; the outstanding balance still counts against your credit limit until fully paid

Regulatory and disclosure terms

Term	Meaning
MITC	Most Important Terms and Conditions, the mandatory disclosure document listing every fee and rule for your card, must be shown before activation
LRS	Liberalised Remittance Scheme, the RBI framework governing how much you can remit abroad annually and through which channels
TCS	Tax Collected at Source, an advance tax collection on certain foreign remittances, adjustable against your final tax liability
RBI Ombudsman / RB-IOS	The free grievance redressal scheme for complaints against banks and card issuers that go unresolved after 30 days
Dormancy closure	A card unused for over a year can be closed by the issuer, but only after notice and a 30-day waiting period

A few more worth knowing

Term	Meaning
Credit shield	Insurance that waives your outstanding card balance if you die or are permanently disabled
Purchase protection	Insurance covering items bought on the card if stolen or damaged within a set window, typically 30-90 days
Surcharge waiver	A fee (usually on fuel) that gets automatically reversed instead of charged, subject to transaction limits
Welcome benefit	A one-time bonus (points, voucher, or fee reversal) for activating a new card or hitting an early spend target
Reward point expiry	The window after which unredeemed points become void; varies by issuer, some now offer non-expiring points

Tips for putting this to use

Bookmark the MITC section on your card issuer's site, not a third-party aggregator's summary of it. Fees and thresholds change, and the MITC is the only version that's actually binding.

When comparing two cards, compare guaranteed rates, not headline rates. A card advertising "10X rewards" usually means 10X only under specific, narrow conditions, the guaranteed rate is what you'll actually get most months.

Learn your own card's grace period and due date pattern, not the generic 45-50 day figure. It genuinely varies by issuer and by your payment history with that specific bank.