Question

when using a debit card, the money comes straight from your checking account. with a credit card, the money...
○ also comes straight from your checking account
○ comes straight from your savings account
○ is a loan from a bank or credit union that you make payments for over time
question 4
10 pts
compounding interest on a credit card can be avoided by...
○ spending equal to or less than your credit limit
○ not buying anything new until your balance is paid off, even if that takes months or years
○ always paying the minimum balance your bill shows you owe
○ paying the full balance every month before the due date

Explanation:

First Question (Debit vs Credit Card)

Debit cards use funds from checking accounts. Credit cards are a form of borrowing: the bank/credit union loans money, and you repay over time. The first two options are incorrect (debit uses checking, credit isn’t from savings).

Compounding interest on credit cards occurs when you carry a balance. Paying the full balance monthly before the due date means no interest (including compound) is charged. Spending under limit, not buying new, or paying minimum don’t avoid compounding (minimum payments lead to interest accumulation).

Answer:

C. Is a loan from a bank or credit union that you make payments for over time

Question 4 (Avoiding Credit Card Compounding Interest)