3. What does the term "finance charge" refer to? A) The total cost of borrowing money, including interest and fees B) The principal amount of the loan C) The loan agreement terms D) The penalty for early repayment

Did you know that finance charges have been around since ancient times? Back in the days of Babylon, borrowers would pay interest on loans made with barley or silver, much like how we incur finance charges today on credit cards and loans! This historical context helps highlight that finance charges are not a new concept; they've evolved with our economy. Now, in the real world, savvy consumers often keep an eye on their finance charges to manage their debts wisely. Understanding these charges can not only help you avoid surprises on your credit card statements but also allow you to negotiate better loan terms or choose credit options with lower rates, making your financial journey smoother.