Question

Identity a true statement about credit cards from the following

a. they are usually tied to a particular asset
b. they have low interest rates
c. they do not have a set upper limit
d. none of the answers is correct

Answer 1

A true statement about credit cards is that they do not have a set upper limit. However, they have high interest rates and it's important to manage credit usage responsibly.

Step-by-step explanation:

A true statement about credit cards is that they do not have a set upper limit. This means that credit cards do not have a maximum spending limit, unlike debit cards which are tied to the balance of your bank account.

However, it's important to note that credit cards do have a credit limit, which is the maximum amount of credit that a lender is willing to extend to you. This limit is determined based on factors such as your credit history, income, and credit score.

In addition, it's worth mentioning that credit cards generally have higher interest rates compared to other types of loans, such as mortgages or car loans. So, while credit cards offer flexibility in terms of spending, it's crucial to manage your credit usage responsibly to avoid accumulating high levels of debt.