Question

Which of the following statements about credit cards is true?

Answer 1

Answer:

D. Credit card companies usually charge higher interest rates for cash advances than for purchases.

Explanation:

A credit card can be defined as a small rectangular-shaped plastic card issued by a financial institution to its customers, which typically allows them to purchase goods and services on credit based on the agreement that the amount would be paid later with an agreed upon interest rate.

Generally, small businesses or companies who avail their customers the opportunity to pay using a credit card will increase the number of customers that would patronize them because they are typically buying the goods and services on credit.

Also, when a credit card holder is requesting for an advance on cash from its merchant or financial institution, they are usually charged more interest rates compared to when using the card to make a purchase.

Hence, the statement which is true about credit card is that, credit card companies usually charge higher interest rates for cash advances than for purchases.