Which of the following are true if you pay only the minimum amount each month towards your credit card bill? AYou will be charged interest on your remaining balance. BYour Annual Percentage Rate will increase. CYou may be in debt for a long time. DBoth A and C are true.

Answers

Answer 1

The answer is: D. Both A and C are true.

All credit card companies impose interest charges to credit card holder in case they fail to fully pay their debt for the month.  The interest rates could be as high as 20%.

Since you do not pay the full balance, the interest charges would be added to the remaining of your debt that you must pay the following month. This mean that your total debt would increase and you would need more time to actually pay off all your debt.

Answer 2

 

Option D is correct. If you pay only the minimum amount each month towards your credit card bill, you will be charged interest on your remaining balance, and you may be in debt for a long time.

Further Explanation:

Credit card:

A credit card refers to the type of loan given by the bank for a certain limit of amount. The individual can take this benefit for a certain period after that; he has to pay back the amount which he borrows from the bank. A credit card can be used for purchasing and point of time purchasing.

The credit card bill has to pay the person who has taken the loan from the banks. If individuals pay only the minimum amount each month, the remaining amount will be charged with a specified rate of interest. The individual ultimately creates the debt for a longer duration.

Justification for the correct and incorrect answer:

A.

You will be charged interest on the remaining balance: This option is incorrect.

The interest will be charged on the left balance of the credit card bill. This statement is true, but it is not the only answer to this question.

B.

Your annual percentage rate will increase: This option is incorrect.

The annual percentage rate is the rate of interest charged for the whole year on the credit balance. It will not increase unless the interest is changed by the company. This statement is incorrect.

C.

You may be in debt for a long time: This option is incorrect.

As the interest will be charged on the remaining balance of the credit card bill, the amount will be increased as the interest added in the principal amount. So, the debt will go for a long time. This statement is true, but it is not the only answer to this question.

D.

Both A and C are true: This option is correct.

The statement is true as both options A and C are correct in the context of this question.

Learn more:

1. Learn more about credit score

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2. Learn more about credit card

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3. Learn more about credit utilization value

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Answer details:

Grade: Middle School

Subject: Accounting

Chapter: Credit card  

Keywords:credit card, minimum amount, each month, the interest charged, maybe in debt, for the long term, type of loan, remaining balance, the certain limit of amount.


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bribing a government official. 

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