Final Answer:
Myrna has a revolving credit account. She doesn’t have to pay the entire balance listed in her credit card statement. She can choose to make a minimum payment instead. The credit card company will apply interest on the portion of the balance that she doesn’t pay at the end of the billing cycle.
Step-by-step explanation:
Revolving credit accounts, such as credit cards, allow the account holder to carry a balance from one billing cycle to the next. Myrna's option to make a minimum payment means she can pay only a fraction of the total balance listed on her credit card statement. This minimum payment typically covers the interest accrued and a small percentage of the outstanding balance. The remaining balance is carried over to the next billing cycle.
For instance, if Myrna's credit card statement shows a total balance of $1,000 and she chooses to make a minimum payment of 3% of the balance, she would pay $30. The credit card company would then apply interest, which is calculated on the remaining $970 (the original balance minus the minimum payment). This interest is added to the next billing cycle's statement, and Myrna has the option to pay a higher amount or continue making minimum payments.
Over time, if Myrna consistently makes only the minimum payment, the interest can accumulate, and it may take a long time to pay off the original balance. This characteristic of revolving credit accounts emphasizes the importance of managing credit responsibly and understanding the implications of carrying a balance.