What is a future consequence of making minimum payments each month?

Business

1 answer:

Luden [163]3 years ago

6 0

Answer:

A: a longer period in debt

Explanation:

Minimum payments are generally associated with credit card debts. A credit card allows the user to spend on credit. At the end of every month, the credit card company sends the customer a statement detailing the amount they owe. The statement shows the total outstanding amount and the minimum amount payable.

Paying the total outstanding amount clears the total credit card debt helping the customer avoid interest charges. Paying the minimum amount means the customer will have a balance carried forward to the following month, attracting interest charges.

Paying the minimum amount allows the user to continue using the credit card. There will be a balance carried forward and interest charges if only the minimum amount is paid. Due to the high-interest rates that credit cards charge, the debts increase exponentially. The cardholder will require a long time to clear the debts, which means that the interest charges and penalty amounts will be high.

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