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Simple English definitions for legal terms
credit service charge
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A quick definition of credit service charge:
Term: Credit Service Charge
Definition: A credit service charge is a fee that a bank or credit card company charges for providing credit services to its customers. This fee is usually a percentage of the amount of credit used by the customer and is added to the customer's account balance. It is important to read the terms and conditions of your credit agreement to understand the credit service charges that may apply to your account.
A more thorough explanation:
Credit Service Charge
A fee charged by a lender for providing credit services to a borrower. This fee is usually a percentage of the amount borrowed and is added to the total amount owed by the borrower.
- A credit card company charges a 3% service charge on all cash advances taken by the cardholder.
- A bank charges a 1% service charge on a personal loan taken by a borrower.
These examples illustrate how a credit service charge is a fee charged by a lender for providing credit services to a borrower. The fee is usually a percentage of the amount borrowed and is added to the total amount owed by the borrower. In the first example, the credit card company charges a 3% service charge on all cash advances taken by the cardholder. This means that if the cardholder takes a cash advance of $100, they will be charged an additional $3 as a service charge. In the second example, the bank charges a 1% service charge on a personal loan taken by a borrower. This means that if the borrower takes a loan of $10,000, they will be charged an additional $100 as a service charge.