After the introductory period, all consumers who have this Platinum Card will...

After the introductory period, all consumers who have this Platinum Card will...

December 10, 2024

Question: After the introductory period, all consumers who have this Platinum Card will...

A) Be charged an Annual Fee
B) Qualify for an A.P.R. based on their creditworthiness
C) Pay the same A.P.R.
D) Pay the Penalty A.P.R. of 30.24%

Answer: A) Be charged an Annual Fee

Explanation:

Step1: Understanding the Introductory Period

Credit cards often come with an introductory period that may offer benefits such as a 0% Annual Percentage Rate (APR) or waived fees to attract new customers. This period is typically temporary and designed to encourage cardholders to use the card before standard terms apply.

Step2: Analyzing the Options

  • Option A: Be charged an Annual Fee
    Platinum cards are premium products that usually come with an annual fee to cover enhanced benefits and services. This fee is commonly implemented after the introductory period ends.

  • Option B: Qualify for an A.P.R. based on their creditworthiness
    While the APR is determined by creditworthiness, this is a standard practice that applies from the outset, not specifically after the introductory period.

  • Option C: Pay the same A.P.R.
    Introductory periods often feature promotional APRs that differ from the standard rates applied afterward. Therefore, the APR typically changes post-introductory period.

  • Option D: Pay the Penalty A.P.R. of 30.24%
    Penalty APRs are usually imposed only when a cardholder violates terms, such as making late payments. This is not a standard outcome for all consumers after the introductory period.

Step3: Determining the Correct Answer

Given that platinum cards commonly charge an annual fee to provide premium benefits, and this fee is typically applied after any introductory offers have concluded, Option A is the most accurate choice.

Extended Knowledge:

Annual Fee

An annual fee is a yearly charge that credit card issuers impose for the benefits and services associated with the card. Premium cards like Platinum often include perks such as travel insurance, concierge services, and rewards programs, which justify the higher annual fee compared to standard cards.

Annual Percentage Rate (APR)

The APR represents the interest rate charged on outstanding balances. It can vary based on the cardholder's creditworthiness and the terms set by the issuer. Introductory APRs are often lower or 0% to attract new customers, after which the standard APR applies.

Penalty APR

A penalty APR is a higher interest rate applied when a cardholder violates the terms of the credit agreement, such as making late payments or exceeding the credit limit. This rate serves as a deterrent against delinquent behavior and compensates the issuer for increased risk.

Creditworthiness

Creditworthiness assesses an individual's ability to repay debts, influencing the APR offered by credit card issuers. Factors include credit score, income, debt levels, and credit history. Higher creditworthiness typically results in lower APRs and more favorable terms.

Certainly, here are four questions similar or related to the one you provided, formatted as per your request:


Similar Questions

Question 1: After the introductory period, consumers with the Platinum Card will...

A) Pay the same A.P.R.
B) Qualify for an A.P.R. based on their creditworthiness
C) Pay the Penalty A.P.R. of 30.24%
D) Be charged an Annual Fee

Answer: B) Qualify for an A.P.R. based on their creditworthiness

Brief Explanations:

After the introductory period, the A.P.R. for the Platinum Card is determined based on the consumer's creditworthiness, meaning those with better credit profiles may receive more favorable interest rates.


Question 2: Which transaction type typically has the highest A.P.R. on credit cards?

A) Purchases
B) Balance Transfers
C) Cash Advances
D) Introductory Offers

Answer: C) Cash Advances

Brief Explanations:

Cash advances usually carry higher A.P.R.s compared to regular purchases or balance transfers, making them a more expensive option for accessing cash through a credit card.


Question 3: What is a common consequence of missing multiple credit card payments?

A) A decrease in credit limit
B) An increase in reward points
C) Application of a Penalty A.P.R.
D) Waiving of annual fees

Answer: C) Application of a Penalty A.P.R.

Brief Explanations:

Missing multiple credit card payments can trigger a Penalty A.P.R., which is a higher interest rate applied to your account, increasing the cost of carrying a balance.


Question 4: What does an introductory A.P.R. offer on a credit card mean?

A) A permanent low interest rate
B) A temporary low or 0% interest rate for a set period
C) A high interest rate that decreases over time
D) An interest rate that varies daily

Answer: B) A temporary low or 0% interest rate for a set period

Brief Explanations:

An introductory A.P.R. is a promotional interest rate offered for a limited time, after which the standard A.P.R. applies. It's important to understand the duration of this period and the rate that will follow.