Prepaid Finance Charge

  

Categories: Credit

Our local gas station just taped up a new notice in its front window. Every time we pay for gas using a debit or credit card, we’ll be charged a 25-cent fee. “What kind of malarkey is this?” we ask ourselves as we fill up our Prius.

This kind of malarkey isn’t actually malarkey at all. Rather, it’s something called a “prepaid finance charge”: a separate fee we automatically pay when completing a transaction.

We see prepaid finance charges all over the place—like our fave gas station—but one of the most common places they can be found is in the wonderful world of loans. If we, for example, decide to buy a house, we’ll have all sorts of prepaid finance charges attached to our closing costs: origination fees, administration costs, processing fees, etc. These fees are automatically added onto our bill, and must be paid in full if we want to conclude the transaction—i.e., if we want the home loan—which is why they’re considered “prepaid.” Sometimes these fees are negotiable, but usually only before we pay them. Also, since lenders don’t always tape notices in their windows telling us what kinds of fees we’ll be paying and how much they are, it’s wise to shop around, ask questions, read the fine print, and make sure we know what we’ll be asked to pay come closing time.

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Finance: What is Stagflation?0 Views

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Finance allah shmoop What is stagflation All right well to

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win a single male deer gets really pumped Yeah maybe

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that well it's actually a really bad economic situation The

00:14

economy is stagnating not growing and maybe it's even shrinking

00:19

with unemployment rampant And at the same time prices are

00:23

getting higher That is there is in fire ablation Well

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fuse those two elements together and you have stagflation Generally

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high inflation and stagnant growth live on opposite sides of

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the economic playground You usually don't have one without the

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other far far away Like if the economy is weak

00:41

and demand is light and people are unemployed Well then

00:45

why Or even how could prices possibly go up in

00:49

an inflationary environment rather than down Yeah doesn't make sense

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But this phenomenon does happen So what causes the perfect

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storm to create it To create this stagflation Well it

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could be one of two things Really There might be

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a supply shock Like if oil prices suddenly skyrocket like

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they did in the seventies Or there is quote extra

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unquote e two largest supply of money Well how does

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that happen While the government simply prince too much cash

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The central bank expands the money supply and or creates

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too much credit low interest rates for borrowing for all

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and well now we have inflation even in a stagnant

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time Then taxes go up and or interest rates rise

01:30

so we have slower growth Punishes it on the other

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waves People are starting to buy last They're feeling the

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interest rate Incheon was expensive credit cards right They bite

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you when you go to the mall and you have

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to pay twenty two percent a year So yeah it's

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a rare situation but it has happened in the past

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So when did this phenomenon most recently occur How vicious

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was it Yeah the nineteen seventies they're known as the

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era of stagflation The government was manipulating the business world

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trying to grow the economy while at the same time

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demanding wage khun trolls feeling supply and supporting unions making

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america less competitive globally while the rest of the world

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was suffering as well as we were under the oil

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price shock that the arab opec oil boycott of america

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and the rest the world kind of came to bear

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it was an ugly time the era of stagflation and 00:02:19.61 --> [endTime] yeah thanks there jimmy

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