Finance Charge


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Finance Charge

The amount owed to a lender by a purchaser-debtor to be allowed to pay for goods purchased over a series of installments, as opposed to one lump sum at the time of the sale or billing.

A finance charge, sometimes called the cost of credit, is expressed as an annual interest rate levied upon the purchase price. It does not include any amounts that the lender might require for insurance premiums, delinquency charges, attorney's fees, court costs, collection expenses, or official fees that might be incurred should the debtor default in the repayment of the debt.

Federal and state "truth-in-lending" laws mandate that the complete cost of finance charges be fully disclosed on credit agreements and billing statements.

Cross-references

Consumer Credit Protection Act.

References in periodicals archive ?
The shortfall in payment of Dh10,600 resulted in a finance charge of Dh1,104.
Subprime specialist issuers universally set the minimum finance charge at $1.
If a borrower failed to meet those conditions, the offer did not apply, and he or she would be required to pay a finance charge from the start of the loan.
You must receive, in writing, the finance charge (a dollar amount) and the annual percentage rate or APR (the cost of credit on a yearly basis).
Assemblyman Neil Cohen (D-Union County), Chairman of the Assembly's Financial Institutions and Insurance Committee, said the legislation would exempt policies from the existing requirement that the finance charge be calculated at a rate agreed to by the premium finance company and the insured.
In order to capture a significant share of the remaining untapped cardmember base in the Philippines, JCB is offering innovative products such as myDream JCB, launched in 2003 by Bankard, with a uniquely low annual fee of P800, compared to the usual P1,200, and a finance charge rate of 2.
which will yield a sum equal to the amount of the finance charge when it is applied to the unpaid balance of the amount financed .
Shoppers pay 10 percent of an item's value, then have 60 days to pay it off, with no finance charge.
In August, I made the full payment as per the statement and expected everything to be okay, but when I checked the statement of September I noticed there was a finance charge again.
We will calculate finance charges on cash advances by multiplying the 'average daily balance of cash advances' by the total number of days in the billing cycle, and multiplying the product by the daily periodic rate of finance charge then in effect.
During such an amortization event, finance charge collections normally allocated to the seller will become available to cover trust expenses through a structural feature that fixes the finance charge allocation based upon pre-amortization invested amounts.
My credit card bill recently showed up with a zero balance and a 50-cents finance charge along with a $25 late charge.

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