A Charge Just for the Privilege of Having a Credit

question 101

Multiple Choice

A charge just for the privilege of having a credit card, whether you use it or not, is referred to as a(n) _____.

• A) annual fee
• B) probationary fee
• C) balance fee
• D) royalty fee

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Definitions:

Interest Expense

Interest expense is the cost incurred by an entity for borrowed funds, payable over a certain period to the lender as compensation for the loan.

Installment Note

A debt instrument that requires a series of periodic payments, often including both principal and interest, over a set period of time.

Carrying Amount

The value of an asset or liability as reported in a company's financial statements, reflecting adjustments like depreciation or amortization.

Installment Note

A loan that is repaid over time with a set number of scheduled payments.