Two competitive banks offer credit cards. Bank X charges 1.4% per month on the unpaid balance and no annual fee. Bank Y charges 1.1% per month with an annual fee of $60. Suppose your
Average unpaid balance is $600. Which bank's card is the better choice for you?

Question

Quizplus · Accepted Answer

Bank X charges $8.40 per month ($600 * 1.4%), totaling $100.80 annually. Bank Y charges $6.60 per month ($600 * 1.1%), totaling $79.20 annually, plus a $60 fee, totaling $139.20. Bank X is cheaper.

Two Competitive Banks Offer Credit Cards