BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Megan missed making her January and February credit card payments while she was participating in her college’s Study Abroad program when the friend she left in charge of sending the payments in forgot.
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Megan’s credit card payment has been paid in full each of the last 6 months.
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Megan’s card had a lower introductory interest rate for the first year and now the interest rate has increased, as stated on her contract.
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The new computer Megan purchased made her account go over the credit limit for 1 week, until the credit card company processed her credit card statement.
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Detailed explanation-1: -You’re probably most familiar with credit card APR (annual percentage rate) as the interest charged on purchases and other transactions. A penalty APR is a higher-than-normal rate that results from violating a card’s terms of service-for example, if you fail to pay your monthly bill on time.
Detailed explanation-2: -There are three main ways a late or missed payment can impact you financially: You can be charged late payment fees. You may face having the interest rate on your card raised to the penalty rate. Your late payment may be added to your credit history and can end up affecting your credit score.
Detailed explanation-3: -A penalty APR is a higher APR that some credit card issuers charge you if you’re behind on your payments, you max your card out, or you pay your bill with a check that bounces. The penalty will apply to your current debt balance on your card, as well as any future charges that you make on the card.
Detailed explanation-4: -Pay off your balance every month. Avoid paying interest on your credit card purchases by paying the full balance each billing cycle. Resist the temptation to spend more than you can pay for any given month, and you’ll enjoy the benefits of using a credit card without interest charges.