A Schumer box lists the main information about a credit card, such as its APR, grace period, and minimum payment. What is meant by the term minimum payment? Choose 1 answer: A It is the annual fee associated with your credit card. B It is the amount you need to fully pay off your balance each month. C ) It is the smallest amount you can pay each month to keep your account in good standing.

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A Schumer box lists the main information about a credit card, such as its APR, grace period, and minimum payment. What is meant by the term minimum payment? Choose 1 answer: A It is the annual fee associated with your credit card. B It is the amount you need to fully pay off your balance each month. C ) It is the smallest amount you can pay each month to keep your account in good standing.

Answer 1

In this question, we are tasked with identifying what the term "minimum payment" means in the context of a credit card. Option (A) is incorrect because an annual fee associated with your credit card is a charged fee by the card provider on a yearly basis and it isn't what the minimum payment refers to. Option (B) is also incorrect because the 'minimum payment' does not necessarily mean that a cardholder will be free of debt at the end of the month, it is only the smallest allowable payment to keep the account in good standing. Therefore, the most accurate answer is Option (C). The minimum payment references the smallest amount you need to pay each month, usually a certain percentage of your balance, to keep your credit card account on good terms with your credit card issuer. Failing to make the minimum payment by the due date results in penalties such as late payment fees and the potential for a higher APR.

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