Which of the following is true about credit cards?(1 point)
Responses
They usually charge a lower interest rate than debit cards.
When you use one, the money is taken directly from your bank account.
They are issued by networks such as Visa.
You can run up huge debts if you don’t pay the balance off quickly.
You can run up huge debts if you don’t pay the balance off quickly.
The correct answer is:
- You can run up huge debts if you don't pay the balance off quickly.
To determine which of the statements is true about credit cards, we will go through each option and explain how you can confirm its accuracy.
1. "They usually charge a lower interest rate than debit cards."
To verify this statement, you can compare the interest rates of credit cards and debit cards offered by different financial institutions. You can visit the websites or contact customer service of various banks or credit card companies to gather information about their interest rates. Additionally, you can search for articles or consumer reports that compare the interest rates of credit cards and debit cards.
2. "When you use one, the money is taken directly from your bank account."
This statement is not true for credit cards. When you use a credit card, the transaction does not directly deduct money from your bank account. Instead, it creates a debt that you are required to repay to the credit card issuer by the due date mentioned on your credit card statement.
3. "They are issued by networks such as Visa."
This statement is true. Credit cards are issued by various networks, including Visa, Mastercard, American Express, and Discover. These networks facilitate the processing and acceptance of credit card transactions by collaborating with banks and financial institutions.
4. "You can run up huge debts if you don’t pay the balance off quickly."
This statement is also true. Credit cards give you the ability to make purchases and borrow money up to a specified credit limit. If you do not pay off the balance on your credit card in full by the due date, the remaining amount will accrue interest. Over time, this can lead to a substantial debt if not managed responsibly.
Based on the explanations provided, the statements that are true about credit cards are:
- They are issued by networks such as Visa.
- You can run up huge debts if you don't pay the balance off quickly.