Multiple Choice
Which of the following statements best describes the difference between money market accounts and money market mutual funds regarding federal deposit insurance?
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1. Introduction to Accounting
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Which of the following is the best strategy to avoid paying interest on your credit cards, according to EverFi?
A
Pay your credit card balance in full each month before the due date.
B
Transfer your balance to another credit card every month.
C
Make only the minimum payment required each month.
D
Use your credit card only for large purchases.
Verified step by step guidance1
Understand the concept of credit card interest: Credit card interest is charged on any unpaid balance after the due date. Paying the balance in full each month avoids interest charges.
Analyze the options provided: Evaluate each strategy to determine its effectiveness in avoiding interest charges.
Option 1: Paying the credit card balance in full each month before the due date is the most effective strategy to avoid interest charges, as it ensures no balance is carried forward.
Option 2: Transferring your balance to another credit card every month may temporarily avoid interest but often incurs fees and does not address the root issue of paying off the balance.
Option 3 and 4: Making only the minimum payment or using the card only for large purchases does not prevent interest charges, as unpaid balances will still accrue interest.
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