Question

Which of the following is a fee you must pay for missing a monthly payment deadline for a credit card?

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

Answer 1

The fee for missing a monthly credit card payment deadline is a 'late fee'. An annual fee is charged yearly, while a finance charge is the interest on carried balances.

Step-by-step explanation:

The fee you must pay for missing a monthly payment deadline for a credit card is a late fee. A credit card company typically charges a set amount, such as $10, when a payment is late, and may also charge additional fees for each day the payment remains unpaid. In contrast, an annual fee is a charge you must pay yearly for the privilege of using a credit card, and a finance charge is the interest accrued on the balance carried from month to month. It is vital to make at least the minimum monthly payment to avoid these extra charges and to try to pay off the debt quickly to minimize interest expenses.