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

Question

Quizplus · Accepted Answer

Since Mike always pays the total outstanding balance monthly, he is not charged interest. The annual fee is an upfront charge, so it would not show up on a monthly statement. The $30 fee is most likely an over-the-limit fee since Mike's credit limit is $1,000 and he made new charges totaling $1,500. A late-payment fee would only be assessed if Mike did not pay his total outstanding balance on time. A transaction fee on purchases would show up as a small percentage of each purchase amount, which is not mentioned in the statement.

Mike Has a MasterCard with an Annual Fee of $25,18