A credit card is not like a bank account. In a bank account, the finance charge is the balance on your account that you are charged when you make a purchase.
Credit cards are like bank cards, except they are not issued by a bank. The finance charge is the percentage we charge on a credit card each month. For example, a $50 debit card might charge you $0.50 per month interest.
When you use a credit card, you typically use the money for several different things. You may purchase a $100 bill, a $100 gift card to your favorite store, or a $100 travel credit card. Many credit cards charge a finance charge of at least 1% per month on the total amount you use. This charge is included in the cost of credit cards, and will show up in your statement as a “finance charge” when you apply for a credit card.
Credit cards also have a finance charge. So if you use your credit card and it earns a finance charge of 1.00, that is the amount you use. If you use the card but don’t pay it off, then your credit card company will charge you $10 on that credit card.
So if you are a credit card user you should be aware of the actual finance charge of your credit card. However, it’s important not to confuse the actual charge with the finance charge. As an example, let’s say you are a credit card user with a credit limit of $2,000. Instead of using that credit card at $2,000 a month it is actually costing you a finance charge of 0.01 per month.
One could argue that because a credit card user is charged a finance charge at 0.01 per month, they are being charged the actual finance charge of their credit card. However, that is not the case. When you use a credit card, you pay the actual finance charge of the card. In fact, the credit card company gets paid back on the credit card every month. So if you have a credit card with a charge of 0.
1.00 percent, you are paying 0.01 percent. A credit card company gets paid back every month. So when you pay your credit card bill, you are actually paying the actual finance charge of the card.
Here’s a good way to think about this: You pay for the car, you pay for the gas, and you pay for the groceries. Now, in the case of the credit card, the credit card company is taking out the credit card charge. This is why it is so important to make sure that the finance charge is not more than 0.1.00 percent. When you use a credit card, you are paying the actual finance charge of the card.
The finance charge is the actual cost of your credit card. So if you pay your credit card bill in a month, it is actually the finance charge that you are paying. You are not actually paying the credit card company. They are taking a percentage of that finance charge.