A finance charge according to United States law is considered to be any fee that is representing the cost of credit, or the cost of borrowing. This is how banks and credit card companies earn money by charging their customers to borrow money from them. Usually banks and credit card companies have you pay a portion of the finance charge each month. If you are late in making payments and miss the grace period (which is usually anywhere from a few days to 20 days after the payment is due) then that can lead to an additional finance charge. You can acquire details on the federal definition of a finance charge in the Truth-In-Lending act and Regulation Z. Both of these documents are enforced by the Federal Reserve Board.
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