Question

Which of the following are true if you pay only the minimum amount each month towards your credit card bill?a. You will be charged interest on your remaining balance.b. Your Annual Percentage Rate will increase.c. You may be in debt for a long time.d. Both A and B are true.

Answer 1

Answer:

The correct answer is A and C as both are true statement.

Explanation:

Credit Card is a facility which is offered by banks to borrow money and it could be used by the borrower for buying expensive goods and the services up front. It has a time period, in which the borrower need to make payment for the amount used by the borrower along with the interest charged.

So, if the borrower paid the minimum amount towards the credit card, then the borrower is still in debt until clears or paid the whole amount and also will be charged the interest against the remaining balance or amount.