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The
finance charge is the total cost of borrowing
a sum of money which is given either as credit or
as a loan. Contrary to what some people believe,
the finance charge is not the same as the
interest rate. Interest rates along with all
other applicable fees are the factors used in the
calculation of the finance charge. The finance
charge typically is calculated based on the
credit card balance so the amount will vary
from month to month. As required by law, every
credit card issuer will provide in the
card holder agreement a detailed explanation
of the way
finance charges will be calculated.
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