Question

Which of the following is a fee you must pay for credit card companies loaning you the money you can't pay back when your bill is due?

1. annual fee
2. finance charge
3. late fee
4. all of the above

Answer 1

The fee associated with borrowing money from a credit card company when you can't pay back the amount due on time is the finance charge, which includes interest and other fees.

Step-by-step explanation:

The fee that must be paid to credit card companies for loaning you the money that you cannot pay back when your bill is due is known as the finance charge. This includes not only the compounded interest on the outstanding balance but can also encompass other fees related to the borrowing of that money. If a payment is late, a late fee is often charged, which for our example is $10 immediately after the payment is late and $5 for each additional day the payment remains unpaid. While annual fees are another expense related to credit cards, they are not directly tied to the act of borrowing money and are a general yearly charge for having the credit card.