Glossary

Glossary of financial terms

There are a range of finance products available to you through Close Brothers Military Services and these, along with some of the key finance terms you are likely to encounter, are explained below.

Q. Hire purchase

A. A hire purchase agreement is similar to a conditional sale agreement. The only difference with hire purchase is that you don’t have to take legal ownership of the vehicle. Once all payments have been made you have the option to simply hand back the vehicle to us.

Q. Conditional sale

A. Under a conditional sale agreement we would pay for a vehicle on your behalf and allow you to pay for it in instalments. A deposit would be required for you to take possession of the vehicle, but it would still be legally owned by Close Brothers Military Services until all payments had been made.

Q. Guaranteed Asset Protection Insurance (GAP)

A. Guaranteed asset protection or GAP is an insurance product designed to protect you financially should your vehicle be written off whilst there is still finance owing on your agreement.

Q. APR

A. APR stands for ‘annual percentage rate’ which calculates the interest rate for your finance agreement over a whole year rather than just your monthly fee. APR allows you to compare the cost of borrowing from a number of alternative channels.

Q. Balance transfers

A. A balance transfer is an option offered by many credit card issuers which enables you to use your available credit from one card to pay off the balances due on one or more other cards. Usually the interest rate on the amount borrowed is lower than the rate of the cards that are being paid off by the balance transfer.

Q. Card holder agreement

A. A credit card agreement is an important document which describes in detail the terms and conditions associated with a particular credit card. A card holder agreement is lengthy, but you’re strongly advised to read the document in full before using the associated credit card as using the card implies an acceptance of all stated terms. Required by law, a typical card holder agreement will describe:

• The dispute resolution process
• The rate of finance charges and APR
• All associated fees/service charges
• How the credit card can be used
• The payment terms
• Personal information disclosure
• The cardholder's responsibility if the card is lost or stolen.
• All associated fees/service charges
• How the credit card can be used
• The payment terms
• Personal information disclosure
• The cardholder's responsibility if the card is lost or stolen.

Q. Can I add an additional card holder?

A. When you have a credit card, it’s often possible to add an additional card to the account for use by someone else. The main cardholder holds responsibility for ensuring payments on the additional card are made. Purchases are shown on the credit card statement, which is sent monthly.

Q. Visa card

A. A card that bears the Visa symbol and which enables a Visa cardholder to obtain goods, services or cash from a Visa merchant or enquirer. Visa cards are accepted at over 24 million outlets worldwide. Visa is one of the worlds leading payment brands backed by a secure payments network.

Q. Credit card statement

A. A credit card statement is a summarised bill that is sent by the creditor to all its customers every month. The majority of card statements sent out are sent by issuers of credit cards. Most lenders will send them out, either electronically or via a paper billing statement. A monthly card statement is a summary of all activity related to a specific account that took place during a previous 30-day cycle. The card statement will show all new purchases and all payments received, as well as the current balance of the account, the finance charges that has been calculated, any other fees, the available credit and the credit limit.