Fees Charged to Customers

Fees Charged to Customers - Late payments or overdue...

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Interest on outstanding balancesInterest charges vary widely from card issuer to card issuer. Often, there are "teaser" rates in effect for initial periods of time (as low as zero percent for, say, six months), whereas regular rates can be as high as 40 percent. In the U.S. there is no federal limit on the interest or late fees credit card issuers can charge; the interest rates are set by the states, with some states such as South Dakota, having no ceiling on interest rates and fees, inviting some banks to establish their credit card operations there. Other states, for example Delaware, have very weak usury laws. The teaser rate no longer applies if the customer doesn't pay their bills on time, and is replaced by a penalty interest rate (for example, 23.99%) that applies retroactively. [edit] Fees charged to customersThe major fees are for:
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Unformatted text preview: Late payments or overdue payments Charges that result in exceeding the credit limit on the card (whether done deliberately or by mistake), called overlimit fees Returned cheque fees or payment processing fees (e.g. phone payment fee) Cash advances and convenience cheques (often 3% of the amount) Transactions in a foreign currency (as much as 3% of the amount). A few financial institutions do not charge a fee for this. Membership fees (annual or monthly), sometimes a percentage of the credit limit. Exchange rate loading fees (sometimes these might not be reported on the customer's statement, even when applied). [30] The variation of exchange rates applied by different credit cards can be very substantial, as much as 10% according to a Lonely Planet report in 2009.[31]...
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This note was uploaded on 02/29/2012 for the course ECON 4223 taught by Professor Johnp.willen during the Spring '12 term at UCLA.

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