Multiple choice general knowledge

You receive your Visa credit card statement on the 1st of the month and it is due 15 days later. Since you always send the minimum payment, there is no financial advantage in mailing your check early as long as it is received by the 15th.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Finance charges on credit cards are calculated based on the average daily balance, not just whether the minimum payment is made. Sending payment earlier reduces the average daily balance, thus reducing interest charges. There IS a financial advantage to paying earlier.

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