VIDEO:� Credit Card Debt Explained
ANSWER = D
The credit card company extends you a line of credit. You purchase "stuff" and then have the choice to pay the balance in full or a minimum payment each month.
2. What is the advantage of paying your credit card balance in full each month?
ANSWER = D
You avoid paying any interest & fees
(if pain in full, your credit card gave your a 25 day loan for free!)
3. What is an outstanding balance?
ANSWER = B
The amount you spent in total + fees & past-due payments (late)
4. Why is it more difficult to get out of debt when only paying the minimum payment?
ANSWER = B
The majority of your minimum payment is going toward interest and finance charges and only a small amount toward the principal
5. The video advises you to "be a deadbeat.” What does that mean?
ANSWER = A
Paying your credit card bill in full and on time every single month, thus paying no interest or fees