Question by X-Malleus: What specifically is a finance charge, and beneath what situations will I require to spend one?
Fairly a lot specifically what the main query says. I have no thought what a “finance charge” is. For instance, would I be charged a finance charge if I charged a acquire, and then paid the balance instantly?
Any further details that could be offered would be great, as I am contemplating acquiring my first credit card, and want to know every thing I can so that I don’t get myself into trouble.
Greatest answer:
Answer by Kaiden
A “finance charge” is the fee you pay the bank for the comfort of them letting you borrow funds. Some banks calculate your finance charge primarily based upon your typical every day balance inside the month, even though some calculate based on your balance at the time your invoice closes.
When you go about signing up for a credit card, the information will let you know what variety of APR you’ll be acquiring. With it becoming your 1st credit card, you are likely to get an APR about 20%. That means, the interest you will be charged YEARLY is 20%. To uncover what you’d be charged monthly, simply divide it by 12 it would finish up being 1.67% per month.
As an instance, if your balance was $ 100, your finance charge would be $ 1.67. That sounds low-cost, but just keep in mind, it adds up.
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