Which of the Following Statements Is True About Bank Credit

question 112

Multiple Choice

Which of the following statements is true about bank credit cards like VISA and MasterCard?

• A) They are an excellent source of emergency funds for unexpected expenses.
• B) Their interest rate is generally lower than a loan at a credit union.
• C) Like home equity loans, the interest paid on credit cards is tax deductible.
• D) Their interest rate is lower than home equity lines of credit.

---

Definitions:

Related Expense

Costs that are directly connected to or a result of a specific business activity or operation.

Subsidiary Contract

An agreement or contract involving a company that is controlled by another parent company.

Initial Value Method

An accounting practice for investment recording wherein the investment is kept at its original cost on the balance sheet without adjusting for changes in net income of the investee.

Dividends

Earnings disbursed by a company to its shareholders, generally as a sharing of profits.