Question

Why is it important to know the interest rate on your credit card?

The higher the interest rate, the more money you will be paying back
The higher the interest rate, the less money you will be paying back
The lower the interest rate, the more credit you can open
The lower the interest rate, the more money you can spend

Answer 1

@AP ? i didnt know where to put this lol

Answer 2

@dude ? @Shadow ?

Answer 3

@Rosebud24

Answer 4

Moved to Finances

Answer 5

ok

Answer 6

Its the final one i think but im not sure

Answer 7

meep

Answer 8

shadow do u agree with her or do uk this?

Answer 9

Interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

From: https://www.investopedia.com/terms/i/interestrate.asp

Their example: "For example, if an individual takes out a $300,000 mortgage from the bank and the loan agreement stipulates that the interest rate on the loan is 15%, this means that the borrower will have to pay the bank the original loan amount of $300,000 + (15% x $300,000) = $300,000 + $45,000 = $345,000."

Answer 10

So if I lend you $100 and charge you 10% interest, how much do you owe me back?

Answer 11

$110

Answer 12

Correct

Answer 13

yay

Answer 14

So what do you think the answer is?

Answer 15

it looks like A but im still not sure

Answer 16

Well credit card companies basically give you money, and you spend it, but then you need to pay it back. They usually charge low interest rates because you technically don't need a credit card, it's just convenient. But they charge interest for this convenience, so if they charge a higher interest rate, you will have to pay back more.

Answer 17

so then i was correct. its A.

Answer 18

right? @Shadow

Answer 19

yes

Answer 20

ok tyyyy :)

Answer 21

This site has a good example: https://www.discover.com/credit-cards/resources/how-does-my-credit-card-interest-work/

"If your credit card has an APR of 15%, it will have a daily rate of .041096%. Let’s say a cardholder has a balance of $1,000 at the 15% APR standard interest rate. The next day, interest is added and the balance becomes $1,000.41, plus any additional purchases and minus any new credits or payments. This process occurs each day until the end of the cardholder’s monthly statement cycle. So at the end of the month, the beginning $1,000 balance becomes $1013 when interest charges are applied at 15% APR."

Answer 22

no i understand it all pretty well now. now i just have to remember it lol. ty so much :)

Answer 23

No problem