Credit card glossary
The most important credit card terms explained simply.
- 3D Secure
- A security standard for online credit card payments with additional authentication (e.g. Visa Secure).
- Acceptance rate
- The proportion of applicants whose credit card application is approved by the bank.
- Annual fee
- The yearly base fee for holding a credit card. Many cards are permanently free, others charge it depending on the range of services.
- Bonus / welcome offer
- A one-time reward (e.g. credit or miles) that some providers grant for signing up, often tied to a minimum spend.
- Cashback
- A refund of a small percentage of your spending as credit — you get part of every purchase back.
- Charge card
- A card where all transactions are collected and debited in full once a month — without installment payment.
- Contactless payment
- Paying by briefly holding the card or smartphone to the terminal via NFC technology, without a PIN for small amounts.
- Credit limit
- The maximum amount you can spend with your credit card before you have to repay.
- CVC / CVV
- The three- to four-digit security code on the back (or front for Amex) of the card to secure online payments.
- Debit card
- A card where every transaction is debited from the linked account immediately.
- Effective annual interest
- The total annual interest rate including all costs that accrues when using a credit card's installment payment.
- Foreign currency fee
- A surcharge (usually 1–2%) charged on payments in a currency other than euro.
- Installment payment
- A payment method where only part of the credit card bill is settled; the remaining amount is charged interest.
- Lounge access
- An additional benefit of some premium cards that grants free or discounted access to airport lounges.
- Mobile payment
- Paying with a smartphone or smartwatch, e.g. via Apple Pay or Google Pay, by storing the credit card digitally.
- PostIdent
- A procedure for identity verification where you verify yourself at a post office.
- Prepaid card
- A balance-based card that must be loaded in advance — without debt risk and usually without SCHUFA.
- Revolving credit
- The option to repay the credit card bill in flexible installments rather than all at once — interest applies.
- SCHUFA
- Germany's largest credit bureau, which assesses the creditworthiness of consumers.
- Travel insurance
- Insurance benefits included with some credit cards, such as foreign health, trip cancellation or rental car insurance.
- VideoIdent
- An online procedure where you confirm your identity via video call with webcam or smartphone.
- Virtual credit card
- A purely digital card number without a physical card, usable for online payments or mobile payment immediately after application.