In an emergency, you used your credit card for a cash advance of $100. You just received your statement and your total balance due is $985.00. You want to be sure to pay for the recent cash advance so you send in a payment of $400. Your credit card has an APR of 12%. How much of your $400 payment will apply to the cash advance balance?
A) Since it was the most recent charge, $100 of the new payment will apply to the cash advance balance.
B) It doesn't make any difference since the $985 balance includes the cash advance so the $400 payment will lower your total balance regardless.
C) You can't answer this question as it depends on what the interest rate for cash advances is.
D) None of the above is correct.
Correct Answer:
Verified
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