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Which of the following is true about credit cards?(1 point)

Responses

You can run up huge debts if you don’t pay the balance off quickly.
You can run up huge debts if you don’t pay the balance off quickly.

They are issued by networks such as Visa.
They are issued by networks such as Visa.

When you use one, the money is taken directly from your bank account.
When you use one, the money is taken directly from your bank account.

They usually charge a lower interest rate than debit cards.
They usually charge a lower interest rate than debit cards.

1 answer

The true statements about credit cards from the options provided are:

  1. You can run up huge debts if you don’t pay the balance off quickly. - This is true, as credit cards can lead to accumulating debt if the balance is not paid in full each month.

  2. They are issued by networks such as Visa. - This is also true. Credit cards are typically issued by banks but are branded by networks like Visa, MasterCard, or American Express.

The other two statements are false:

  1. When you use one, the money is taken directly from your bank account. - This statement is false. Using a credit card means you are borrowing money up to a limit, and the amount is charged to your credit account, not directly deducted from your bank account.

  2. They usually charge a lower interest rate than debit cards. - This statement is also false. Credit cards generally have higher interest rates compared to the costs associated with using a debit card (which usually does not accrue interest).

So, the correct true statements are the first two.