Legal Definitions - credit service charge

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.