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

i think it is B, am i correct ?

Answer 2

`How Credit Card Interest Works
If you carry a balance on your credit card, the card company will multiply it each day by a daily interest rate and add that to what you owe. The daily rate is your annual interest rate (the APR) divided by 365.

For example, if your card has an APR of 16%, the daily rate would be 0.044%. If you had an outstanding balance of $500 on Day 1, you would incur $0.22 in interest that day, for a total of $500.22 on Day 2. That process continues until the end of the month. If you had a balance of $500 at the beginning of the month and added no other charges, you would end up with a balance of $506.60, including interest.`
source: https://www.investopedia.com/articles/01/061301.asp

Answer 3

tldr: If you bought $500 item with a credit card, you would end up owing $506.60 due to the interest rate being multiplied then added onto the original amount

Answer 4

sooo......which one is it ? im still confused

Answer 5

B is incorrect because $506.60 is more than $500

Answer 6

so a ?

Answer 7

yes

also, if you are curious, options c and d are talking about credit scores and credit limits - topics that affect the amount of money that you can borrow/put on a credit card.

the interest rate affects the amount of money that you need to pay back to the credit card company in addition to the original amount

Answer 8

thank yoooouuuuu <33