Just like you, I wondered what is finance charges in credit card. I learned that it is the cost you pay when you don’t pay your full credit card bill on time. These charges include interest on the unpaid amount, late fees and sometimes even cash advance or foreign transaction fees.
When you see finance charges in credit card bill know that it is the total of all extra costs added to your outstanding balance. This usually happens when you pay less than the full amount due, miss the deadline for payment or withdraw cash using your credit card.
These charges are calculated daily based on your card’s interest rate (APR) and they can add up quickly if you’re not careful.
Your credit card statement gives a detailed view of your spending and dues. You can see how much extra you’re being charged for carrying a balance or making late payments. It’s a clear signal that your card is costing you more than it should. The only way to avoid finance charges in credit card is to pay your total outstanding amount before due date. Avoid cash advances and treat your credit card like a debit card with benefits.
I hope all this gyaan helps you understand what is finance charges in credit card better now.