Cut through the jargon with our glossary of banking terms
Credit Cards
Annual fee
Ongoing administration fee charged each year on many home, business, personal and reverse mortgage loans, as well as credit cards. Admin fees such as these on home and personal loans can also be charged monthly, quarterly or half yearly.
BPay
BPay is an an Australia-wide electronic bill payment service, offered by most financial institutions. It enables consumers to pay bills to a range of businesses registered with the service via their phone banking or internet banking account. Customers use a unique Biller code for each business and an allocated reference number for their bill. Funds come out of their credit card or savings account. Payments can be made 24 hours, 7 days a week which are then processed either the same day or the next day. A similar rival scheme set up by Australia Post is called POSTbillpay.
Charge card
A charge card offers a method of payment where cardholders put purchases on an account which must be fully paid at the end of the month. American Express, Diners Club and retail store cards are examples. Unlike credit cards which involve an extended line of credit allowing card holders to keep their debt outstanding but pay interest for the privilege. Charge card holders who don't pay their accounts by the end of the month, however, are charged penalty interest.
Debit card
A debit card is a method of payment where funds are electronically deducted directly via the EFTPOS system from the cardholder's savings account to pay for purchases. No interest is charged, unlike a credit card where the card issuer advances credit to a cardholder which is repaid at a later date.
Direct Credit
An electronic payment made directly into a bank or building society account, eg. wage and salary payments.
Direct Debit
An electronic payment taken automatically from a customer's bank account by written agreement between the account holder and a goods or service provider. The amounts and dates may vary from payment to payment. Eg, monthly, quarterly or annual bills.
EFTPOS
Electronic Funds Transfer at Point Of Sale. Means of payment whereby debit card holders can pay for purchases by electronic debiting their savings account.
Interchange fees
Interchange fees are charged between banks for processing transactions made on one another's cards via the open Visa or Mastercard systems.
Uniform Consumer Credit Code (UCCC)
The Uniform Consumer Credit Code is legislation to ensure uniformity amongst all credit providers across all Australian states. For example, all loan contracts must now adhere to a uniform format as specified by the act. It must set out all fees and charges that the borrower (and, if required, guarantor) are liable for under the loan contract.
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