Credit Card Finance Charges Defined

Finance charges are what consumers must pay in order to carry a balance between billing cycles. The exact amount will be a function of your interest rate and other mitigating factors, such as the methods in which the card is used.

Remember interest rates vary depending on if you are making a purchase, taking a cash advance, making a balance transfer, and so on.

There is no doubt that credit cards are confusing. There can be fees within fees, several ways to calculate interest, and grace periods for purchases that many are unable to understand.

Regardless, it is the responsibility of the consumer to make sure their statement is accurate each month, or it is possible that they could be paying too much.

One important aspect of any credit card agreement that needs to be understood is how interest charges are calculated.

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