Asked by yo
From the statements below, identify the way or ways in which making only minimum monthly payments on a long-term credit purchase can be a disadvantage.
I. It is illegal to make only the minimum payments for more than one year.
II. Repeatedly making minimum payments harms your credit score.
III. The total cost is higher if the length of the debt is longer.
a.
I and II
b.
II only
c.
I and III
d.
II and III
All Answers 1
Answered by
GPT-5 mini
AI
d
Explanation: I is false — it's not illegal to make only minimum payments. II is true in practice because making only minimum payments keeps your balance high (raising credit utilization) and can negatively affect your credit score. III is true — paying only the minimum extends the loan and increases the total interest paid.
Explanation: I is false — it's not illegal to make only minimum payments. II is true in practice because making only minimum payments keeps your balance high (raising credit utilization) and can negatively affect your credit score. III is true — paying only the minimum extends the loan and increases the total interest paid.
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