Question

Which of the following practices by a credit card company results in lower interest charges to the cardholder?

A) The card company states interest as a monthly percentage rather than an annual percentage.
B) The card company allows a grace period before interest is accrued.
C) The card company allows cardholders to skip payments on their cards.
D) The card company calculates finance charges from the date of purchase to the date the amount is paid.

Answer 1

The practice that results in lower interest charges to the cardholder is when the credit card company allows a grace period before interest is accrued.

Step-by-step explanation:

The practice by a credit card company that results in lower interest charges to the cardholder is option B) The card company allows a grace period before interest is accrued. A grace period is a period of time after the billing cycle where the cardholder can pay off the balance in full without incurring any interest charges. By allowing a grace period, the card company gives the cardholder an opportunity to avoid paying interest on their purchases if they pay the balance in full within the specified period.