Final answer:
A revolving charge account is most expensive when the interest rate is high and the monthly balance is not paid off. Credit cards typically have an annual interest rate of 12% to 18%, which can accumulate significant interest charges on unpaid balances. Managing credit card use by paying off balances and monitoring interest rates can help avoid costly debts.
Step-by-step explanation:
A revolving charge account can be an expensive way to borrow if c) The interest rate is high and the balance is not paid off monthly. With a high-interest rate, every month you carry a balance, you're charged interest on the amount you owe, and the cost is compounded if you only make the minimum payment. Let's consider that on average, the annual interest rate for credit card borrowing is around 15% per year, which means Americans can pay tens of billions of dollars every year in interest on their credit cards, plus any additional fees.
The use of a credit card can help you make purchases when you need them, but it's important to manage the borrowed money wisely. Paying off the balance regularly and keeping interest rates in check are key to avoiding expensive debt. Seeking credit from places like department stores or gas stations may be easier but often comes at the cost of higher interest rates compared to other forms of credit.
The correct option is c) The interest rate is high and the balance is not paid off monthly.