What is Finance Charge?
Category: Finance
1Definition
The total cost of borrowing money, including interest and fees, expressed as a dollar amount.
2Context
Required disclosure on credit cards and loans. Helps consumers compare the true cost of different credit options.
3Example
Your credit card shows a $50 finance charge this month—that's the interest and fees for carrying a balance.
⚠Common Trap
Finance charge isn't just interest—it includes annual fees, transaction fees, and other borrowing costs.
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