Mike has a MasterCard with an annual fee of $25, an 18% interest, and a $1,000 credit limit. He always pays the total outstanding balance monthly. His most recent monthly statement lists the previous month's payment, new charges in the current month totaling $1,500, and a $30 fee. The fee is most likely the result of:
A)interest charges.
B)his annual fee.
C)an over-the-limit fee.
D)a late payment.
E)transaction fees on purchases.

Question

Quizplus · Accepted Answer

Since Mike's new charges of $1,500 exceed his credit limit of $1,000, the $30 fee is most likely an over-the-limit fee. Interest charges wouldn't apply because he pays off his balance monthly, the annual fee is only $25, and there's no indication of a late payment or transaction fees specific to purchases.

Mike Has a MasterCard with an Annual Fee of $25