Which of the following statements is true of an annual percentage rate (APR)?
A)The higher the APR, the greater the interest expense on unpaid balances.
B)All credit card companies charge the same APR for all transactions.
C)Credit card companies do not charge the APR on discounted products.
D)The lower the APR, the lower the cardholder's credit score.

Question

Quizplus · Accepted Answer

An APR represents the yearly interest rate charged on an outstanding credit card balance. Therefore, the higher the APR, the greater the interest expense on unpaid balances.

Option B is incorrect because credit card companies charge different APRs based on the type of transaction, creditworthiness of the cardholder, and other factors.

Option C is incorrect because the APR applies to all purchases and balances, regardless of whether they were discounted or full-price products.

Option D is incorrect because a lower APR does not necessarily relate to a cardholder's credit score, and vice versa. A credit score is just one of several factors used to determine the APR.

Which of the Following Statements Is True of an Annual