The most expensive method for determining finance charges on revolving credit would be the:
A) average daily balance (ADB) method, including new purchases.
B) average daily balance (ADB) method, excluding new purchases.
C) annual percentage rate (APR) method, including new purchases.
D) annual percentage rate (APR) method, excluding new purchases.
E) annual percentage rate (APR) method, excluding new purchases for student credit cards.

Question

Quizplus · Accepted Answer

The average daily balance (ADB) method including new purchases tends to be the most expensive for consumers because it calculates finance charges based on the balance each day of the billing cycle, including new purchases, which can increase the overall balance on which interest is calculated.

The Most Expensive Method for Determining Finance Charges on Revolving