Podcast
Questions and Answers
What is a common type of fee associated with using a credit card to obtain cash?
What is a common type of fee associated with using a credit card to obtain cash?
When is an Annual Fee typically charged in the context of credit cards?
When is an Annual Fee typically charged in the context of credit cards?
What type of fee is imposed when a borrower fails to make a required payment by the due date?
What type of fee is imposed when a borrower fails to make a required payment by the due date?
Which fee is applied when a borrower exceeds their credit limit on a credit card?
Which fee is applied when a borrower exceeds their credit limit on a credit card?
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What do Returned Payment Fees refer to in the context of credit?
What do Returned Payment Fees refer to in the context of credit?
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What does Credit Limit represent in the credit industry?
What does Credit Limit represent in the credit industry?
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What is the purpose of credit collection techniques?
What is the purpose of credit collection techniques?
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When does a bill become past due?
When does a bill become past due?
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What is a common technique used in credit collection for past due accounts?
What is a common technique used in credit collection for past due accounts?
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What action may be taken if a customer does not respond positively to a telephone call regarding overdue payments?
What action may be taken if a customer does not respond positively to a telephone call regarding overdue payments?
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What is one of the consequences mentioned in collection letters for failing to repay a debt?
What is one of the consequences mentioned in collection letters for failing to repay a debt?
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How does the collection effort change as a loan account becomes past due?
How does the collection effort change as a loan account becomes past due?
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What is the characteristic of open credit in terms of payment?
What is the characteristic of open credit in terms of payment?
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Which type of credit requires the balance to be paid in full every month?
Which type of credit requires the balance to be paid in full every month?
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What is the main purpose of interest rates in financial transactions?
What is the main purpose of interest rates in financial transactions?
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In what manner can loans be repaid?
In what manner can loans be repaid?
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What is the typical application of interest rates on credit cards?
What is the typical application of interest rates on credit cards?
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Which financial tool may have varying interest rates for different activities like purchases or cash advances?
Which financial tool may have varying interest rates for different activities like purchases or cash advances?
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Study Notes
Credit Card Fees
- A Cash Advance Fee is a common charge incurred when using a credit card to obtain cash.
- An Annual Fee is typically charged once a year for maintaining a credit card account.
- A Late Payment Fee is imposed when a borrower fails to make a required payment by the due date.
- An Over-Limit Fee is applied when a borrower exceeds their credit limit on a credit card.
- Returned Payment Fees occur when a payment made by the borrower is returned, typically due to insufficient funds.
Credit Concepts
- Credit Limit represents the maximum amount a borrower can charge on a credit card.
- The purpose of credit collection techniques is to recover overdue payments efficiently.
Payment Timing
- A bill becomes past due when the payment is not received by the established deadline.
- A common technique in credit collection for past due accounts is telephone calls to remind borrowers of their obligations.
Collection Actions
- If a customer does not respond to telephone calls about overdue payments, further actions may include sending collection letters or engaging a collection agency.
- Collection letters often mention consequences such as negative credit reporting for failing to repay a debt.
Loan Management
- As a loan account becomes past due, the intensity and frequency of collection efforts typically increase.
- Open credit allows for flexible payment options, but making regular payments is expected.
- Revolving credit requires the balance to be paid in full every month to avoid interest.
Financial Transactions
- The main purpose of interest rates is to compensate lenders for the risk of lending money and the opportunity cost of providing loans.
- Loans can be repaid in various manners, including lump-sum payments or installments.
- Interest rates on credit cards are usually applied to balances carried beyond the due date or for specific types of transactions.
- A credit card may have varying interest rates for different activities, such as purchases, cash advances, or balance transfers.
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Description
Test your knowledge about various fees associated with borrowing money or using credit-related services. Learn about common types of fees imposed by lenders or financial institutions in the realm of credit.