Question

you have a credit card with an 11.9% apr finance charge. you accumulate $900 in charges on this card, $600 of which were made before the billing date. how can you avoid paying a finance charge on this account?

Answer 1

To avoid a finance charge on a credit card with an 11.9% APR, ensure the card has a grace period, pay the full $900 balance before the due date, and continue paying the full balance monthly. Only making minimum payments will result in interest charges, raising your overall debt.

Step-by-step explanation:

To avoid paying a finance charge on a credit card with an 11.9% APR, the key is to understand the credit card's grace period, which is the time allowed by the card issuer to repay the debt without incurring interest. If you want to avoid interest charges on new purchases, you need to pay off the full statement balance by the due date each month.

Suppose you accumulate $900 in charges, with $600 made before the billing date. To avoid finance charges:

1. Make sure that your credit card offers a grace period.
2. Pay the entire balance of $900 before the due date of the billing cycle in which the charges were made.
3. Continue this practice each month, ensuring that the full balance is paid by the due date to prevent any finance charges from accruing.

Remember, if you only make the minimum payment, you will incur interest on the remaining balance. Over time, the cost of the interest can significantly increase the amount you owe.