Asked by
Hadeer Maher
on Nov 25, 2024
Verified
Why do credit card companies typically require small minimum payment amounts on their customers' monthly credit card statements?
A) Credit card companies are concerned that their customers will be put in financial distress if required to make higher payments.
B) Credit card companies want to promote faster repayment, and customers will be encouraged to pay more each month if they're able to pay well beyond the minimum.
C) Credit card companies want to increase profits by promoting slower repayment, and actual customer payments will be anchored by the smaller payment requirements.
D) Credit card companies actually charge the highest minimum payment they are allowed by law to charge.
Minimum Payment Amounts
The lowest amount of money that one is required to pay on a credit card bill or loan each month.
Credit Card Companies
Businesses that issue credit cards to consumers, facilitating electronic payment transactions and often offering credit facilities.
Monthly Credit Card Statements
Periodic summaries sent by credit card companies to cardholders, listing purchases, payments, and other transactions for the month.
- Understand how credit card companies benefit from consumer behavior patterns.
Verified Answer
TN
Learning Objectives
- Understand how credit card companies benefit from consumer behavior patterns.