ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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fraud
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interest
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you paying off your entire bill each month
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Detailed explanation-1: -Credit card companies make money by collecting fees. Out of the various fees, interest charges are the primary source of revenue. When credit card users fail to pay off their bill at the end of the month, the bank is allowed to charge interest on the borrowed amount.
Detailed explanation-2: -The interest rate on a credit card is also called a ‘finance charge’ and is the rate charged by credit card issuers on the amount that has been borrowed. However, the interest charges are applicable only to those cardholders who don’t pay their outstanding in full.
Detailed explanation-3: -Subprime issuers-those that specialize in people with bad credit-typically earn more money from fees than interest.
Detailed explanation-4: -Credit cards charge interest on any balances that you don’t pay by the due date each month. When you carry a balance from month to month, interest is accrued on a daily basis, based on what’s called the Daily Periodic Rate (DPR).