Question

Cecelia receives two credit card offers in the mail. Each has a 0% introductory APR. After the introductory period, the first card has an APR of 19.99% and the second card has an APR of 24.99%. If each card has a late fee of $35 and an annual membership fee of $25, which card should she choose and why?

Answer 1

Answer:

1. We are told they have similar APR (starting) and Annual fee of 25 and similar late fee of 35

• Then we must consider the APR after the initial value
• 19.999% < 24.99%

Hence she should price the first card with a 19.99% APR