Credit Card Question & Answer

Advertising Disclosure is an independent, advertising-supported web site. receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Questions » User Questions » Other » What do the Fees on My Credit Card Bill Mean?

What do the Fees on My Credit Card Bill Mean?

Answered by , at
Add to Favorites:

When we receive our billing statement for our credit card, aside from the purchases that we made, we also look for the fees that were charged. We try to look closely on what is charged and also figure out why and how it is charged. It is important for cardholders know what fees they are dealing with because this will affect their reputation as a debtor. So, to further understand what these fees mean, let us take a look at some fees charged on a credit card.

How are finance charges different from interest fees?

Well, it is basically the same. When we talk about finance charges these are generally the fees charged to your account. It includes interest, late fees, over the credit limit fees, service fees and other transaction fees. It is also described as a fee charged to borrow. Any cost that the banks have to lend you money is what they charge you. It is also the same as an interest charged on your account.

How are finance charges calculated?

If we will include all the other fees charged on your account then there are different ways on how you can calculate each of them. But if you are just wondering how the interest is calculated, it would really depend on your credit card provider on how they calculate it. Usually though, it is calculated by getting the whole balance of your monthly purchases, that is adding all the daily balances that you have, and then multiply it to the interest rate. That is the amount of finance charge that you will have.

There are several ways on how to calculate it. you can read the terms and conditions of your agreement with the credit card company or you can contact their customer service so they can assist you on how they calculate this charge.

What are cash advance fees?

When you do a cash advance with your card, they will usually charge you a cash advance fee. This is the cost of being able to give you more credit.

What are transaction fees?

Transaction fees are also called service fees. This is the amount that credit card companies charge whenever you make a transaction with other companies. It is like an ATM card. Whenever you withdraw from an ATM machine that is not from your bank, it will charge you a transaction fee even if you just want to check your balance. It is the same with credit cards. Also, whenever you ask your credit card provider to do things for you like say for example, giving you paper billing, and maybe an application for rewards and lower interest. This will cost you an amount. The amount of money they will spend on providing you with the things you want they will be charging you.

Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
You could turn $200 into $400 with Cashback Match™. Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
For Excellent, Good Credit
Unlimited 1.5x rewards on every purchase, every day. For every $1 you spend, you earn 1.5x Miles.
For Excellent, Good Credit
No Annual Fee
For Bad Credit

Other Questions in