finance charges

[Lucas Tun]

English Language Proficiency Tests, Advanced Level

ESL/EFL Test #760 "Money: Buying and Spending (2)", question 9

The ......... charges on department store credit cards are usually quite high. I've heard of some rates going as high as 29%.

(a) staple
(b) debit
(c) deposit
(d) finance

English Language Proficiency Tests, Advanced Level

ESL/EFL Test #760 "Money: Buying and Spending (2)", answer 9

The finance charges on department store credit cards are usually quite high. I've heard of some rates going as high as 29%.

Correct answer: (d) finance

Your answer was: incorrect
The deposit charges on department store credit cards are usually quite high. I've heard of some rates going as high as 29%.
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What exactly does "finance" mean in this context ,please? I looked it up in the Dic but couldn't make head or tail of what does that mean, . Or does it simply mean "money"?

[Linda]

Hi Lucas,
Some credit cards want you to pay off your credit card bill every month. But, others let you carry a balance and they charge you a specific interest rate based on your balance. This is called a finance charge and it is calculated each month. Finance charges vary - some interest rates are really high and others aren't.
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[Lucas Tun]

Hello Linda, Thanks for your answer. It has been very helpful. By the way, I,now, know that if you post a question on this site, you can get the answer at the drop of a hat because of helpful teacher like you. Thanks again.

[Linda]

No problem, Lucas. I'm glad the answer was helpful. :)
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