Question

How does paying off the balance monthly help a credit card user avoid finance charges?

Answer 1

Because once you don't pay after a certain time, the bank will heavily charge you interest. Gathering interest increases the amount you pay. Each time you pay a certain amount the deadline is extended

Answer 2

Answer:

Credit cards allows us to make purchases today and pay for them later. If it takes us longer than a month to pay off our balance then we will have to pay an extra fee in the form of a finance charge.

Since finance charges is the way of charging us by the credit card issuing authority for carrying a balance on our credit card and not paying it off completely at the end of each month.

Thus, the simple way to avoid finance charges is to not carry a balance and this can be done by paying off the carrying amount on the credit card at the end of each month.