if your credit card company uses the average daily balance method of determining the balance it uses to…

if your credit card company uses the average daily balance method of determining the balance it uses to figure your finance charges, which of the following is true? a. if you didnt pay off your balance last month, you can lower finance charges by sending your payment well before the payment due - date. b. if you dont pay off your balance each month, finance charges apply only to the part of the balance that hasnt been paid off and not to new purchases. c. you never have to pay finance charges on the previous periods balance because they were already paid during the previous month. d. if you always pay off your balance by the payment due - date, finance charges will still be very high.

if your credit card company uses the average daily balance method of determining the balance it uses to figure your finance charges, which of the following is true? a. if you didnt pay off your balance last month, you can lower finance charges by sending your payment well before the payment due - date. b. if you dont pay off your balance each month, finance charges apply only to the part of the balance that hasnt been paid off and not to new purchases. c. you never have to pay finance charges on the previous periods balance because they were already paid during the previous month. d. if you always pay off your balance by the payment due - date, finance charges will still be very high.

Answer

Brief Explanations:

  • Option A: Sending payment early when last - month's balance is unpaid can lower average daily balance and thus finance charges.
  • Option B: Finance charges apply to unpaid balance and sometimes new purchases too depending on the card's terms.
  • Option C: If not paid in full previously, finance charges on previous period's balance can still be due.
  • Option D: Paying off balance by due date usually results in no or low finance charges.

Answer:

A. If you didn't pay off your balance last month, you can lower finance charges by sending your payment well before the payment due date.