part ii: summarize\n5. summarize the effect of credit card interest on the real cost of items.\n6. what are…

part ii: summarize\n5. summarize the effect of credit card interest on the real cost of items.\n6. what are some strategies consumers can use to reduce the amount of interest theyll pay on credit card debt?

part ii: summarize\n5. summarize the effect of credit card interest on the real cost of items.\n6. what are some strategies consumers can use to reduce the amount of interest theyll pay on credit card debt?

Answer

Brief Explanations:

  1. Credit - card interest increases the real cost of items as it adds an extra expense on top of the item's purchase price. For example, if an item costs $100 and there is a 20% annual interest rate on the credit - card balance, over time, the total amount paid for the item will be more than $100.
  2. Strategies to reduce credit - card interest include paying the full balance each month to avoid interest charges, transferring balances to cards with lower interest rates, and making more frequent payments to reduce the average daily balance on which interest is calculated.

Answer:

  1. Credit card interest increases the real cost of items by adding an extra expense.
  2. Pay the full balance each month, transfer balances to lower - rate cards, make more frequent payments.