ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The interest charged on the money owed to a credit card company.
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A fixed annual percentage rate of the finance charge.
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A charge from the bank for getting a credit card.
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None of the above.
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Detailed explanation-1: -A finance charge definition is the interest you’ll pay on a debt, and it’s generally used in the context of credit card debt. A finance charge is calculated using your annual percentage rate, or APR, the amount of money you owe, and the time period.
Detailed explanation-2: -Credit card interest is the cost of borrowing money from a lender-typically shown as an annual percentage rate (APR). Credit card interest might be charged if the balance isn’t paid in full each billing cycle. Variable, fixed, introductory and promotional interest rates are a few types of credit card interest.
Detailed explanation-3: -In personal finance, a finance charge may be considered simply the dollar amount paid to borrow money, while interest is a percentage amount paid such as annual percentage rate (APR).
Detailed explanation-4: -The finance charge is the cost of consumer credit as a dollar amount. It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit.
Detailed explanation-5: -To sum up, the finance charge formula is the following: Finance charge = Carried unpaid balance × Annual Percentage Rate (APR) / 365 × Number of Days in Billing Cycle .