Question

Suppose you have a credit card bill of $275 for the month of October. If you pay the full balance before your bill is due, how much will you pay in interest?

a) You will pay $0 in interest.
b) You will pay $54.73 in interest.
c) You will pay $63.28 in interest.
d) You will pay $275 in interest.

Answer 1

If you pay the full balance of $275 before your bill is due, you will not have to pay any interest.

If you pay the full balance of $275 before your bill is due, you will not have to pay any interest. Interest is only charged when you carry a balance from one month to the next on your credit card. By paying off the full balance on time, you are considered to be paying off the principal amount and not accruing any interest charges.