Question

Pat receives a letter stating that he has been pre-approved for a credit card. The letter states he would pay zero interest for six months on retail purchases, then it will revert to the standard base rate plus 8%. The 0% interest rate is a(n)

A) Introductory rate
B) Fixed rate
C) Variable rate
D) Annual fee

Answer 1

The 0% interest rate is an introductory rate. During the six-month introductory period, Pat will not be charged any interest on his retail purchases. After the introductory period ends, the interest rate will revert to the standard base rate plus 8%.

Step-by-step explanation:

The 0% interest rate is an introductory rate.

An introductory rate is a promotional interest rate that is offered to new credit card customers for a limited period of time. It is designed to attract new customers and encourage them to make purchases with the credit card.

During the six-month introductory period, Pat will not be charged any interest on his retail purchases. After the introductory period ends, the interest rate will revert to the standard base rate plus 8%.