Question

Consumers who pay more than the minimum payment on credit cards

Answer 1

The correct option is (a) pay less interest in the long run.

Further explanation:

When an individual makes the minimum payment on his credit card then he gives himself temporary relief. It’s when an individual commit to pay more in interest charges. The trade-off might get an individual into serious trouble related to money over time, it happens especially when an individual’s card charges a high rate of interest.

If a person pays the minimum towards his balance each month, then he can expect the following things to happen:

1. Paying down one’s debt takes a much longer time.
2. An individual will gain bigger interest charges.
3. An individual credit score can take a hit.

When an individual starts using a credit card, the minimum payment is one of the important and first things an individual should understand. When an individual pays more than the minimum payment, a person’s credit card balance goes down.

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Answer details:

Grade: Middle School

Subject: Social studies

Topic: Credit Card Minimum Payment

Keywords: interest, minimum payment, trade-off, debt, credit card, rate of interest, money

Answer 2

Answer:

The correct answer is "pay less interest in the long run".

Explanation:

Regarding payment of credit cards debt, most of the credit cards have an option to make a minimum payment which is typically a fixed amount. Paying only the minimum is a tempting option, however, it results in paying more in finance charges. Paying more than the minimum payment is better, because it results in pay less interest in the long run.