What are Finance Charges?

Question

Are they basically the amount owed against the interest rate? Apperently, these aren't accumulated in your minimum payment amount cause the amound I owed was $511.58 and I made a minimum payment for $15.00 (on time) and for whatever reason, I still owe 528.02 now! Is this a monthly orrurance? I'm just trying to find out exactly what's the real amount I need to pay without paying too much.

Answer 1

The finance charge is the interest they are charging you for you to use their money. The finance charge is calculated on the balance. Your statement should give the amount of the finance charge. Late payment or over-limit fees are additional fees that may be charged and can add up quickly. Never just pay the minimum payment.

Answer 2

Finance charges are the figured from the interest rate. Anything that is not prinicpal, or the original bill, is a finance charge. This can be interst, late fees and even annual fees. Paying the minimum will stretch your payments out over many years, sometimes as much as twenty years. Check your statement to see how much of your monthly minimum is going towards finance charges and how much is actually apying off your debt. Any kind of credit is aort of like renting money. You have to pay both the money back and certain fees to use the money.

Answer 3

That is because your loan or whatever is gaining interest! If you don't pay your entire remaining balance, it will gain interest for the next bill. Also, What do you mean paying to much? If this is a credit card bill which I presume it is, then you want to pay it off completely each month if you can. Ultimately you probably want to charge small amounts each month (like one gas fill-up.) and pay if off in entirely. A lot of credit companies look at the percentage of your credit you are using. For Example if you have $1000.00 credit available and are only charging 100 a month (and paying it off), then you are only using 10% of available credit. Usually anything belowe 30-35% is good. In order to not pay more for the items you've purchased, pay them off each month (if you can). If unable, try to pay more than minimum becasue that looks better than the minimum. According to the Wamu Website , "There are five categories of credit data that influence your score in varying degrees: payment history (how timely you've been in paying on your accounts); amounts owed (the outstanding balances on your accounts and the percentage of each credit line you've used); length of credit history (how long your accounts have been open); new credit (the number of recently opened accounts); and types of credit used (the different types of credit relationships you have). Most FICO scores range between 350 and 850, with higher scores representing better credit risk. The higher your score, the more likely you are to get a lower interest rate on a mortgage or car loan. SO PAY IT OFF MAN... and then keep balance each month so you can continue a good credit profile.

Answer 4

Finance charges are added based on how much you owe and are based on your interest rate. The less you owe, the smaller the finance charge will be. And yes, this is a monthly occurance.