Question

19
minimum payment $49.82
payment due date 09/03/2011
payment local time
payment warning:
which is true when you make only the minimum payment each month?
a you are charged interest on the remaining balance
b your credit line is restored to its maximum amount
c credit card companies have permission to sell your info
d it is the fastest way to pay off your debt

Explanation:

To determine the correct answer, we analyze each option:

• Option A (You are charged interest on the remaining balance): When making only the minimum payment on a credit card, the unpaid (remaining) balance accrues interest. This is a fundamental concept in credit card finance.
• Option B (Your credit line is restored to its maximum amount): Paying the minimum does not restore the full credit line; the credit line is restored as you pay down the balance, but minimum payments are small and don't fully pay off the debt, so the credit line isn't fully restored.
• Option C (Credit card companies have permission to sell your info): Minimum payments have no direct relation to a credit card company's ability to sell your information; this is governed by privacy policies and regulations, not payment size.
• Option D (It is the fastest way to pay off your debt): Making only minimum payments extends the time to pay off debt because interest accumulates on the remaining balance, so it's the slowest, not fastest, way.

Answer:

A. You are charged interest on the remaining balance