All else being equal, at a $1,333.33 balance, the two credit cards will offer the same deal (finance charge) over a year.
What is a credit card finance charge?
A credit card finance charge is the fee associated with using credit.
Credit card issuers use the finance charges to minimize non-payment risks and earn some profits for extending credit to cardholders.
Data and Calculations:
Card A Credit B
APR 22% 25%
Annual fee $40 $0
To calculate the balance required, the required equation is
= 22%x + $40 = 25%x
Where x = required balance
Thus,
= 0.22x + $40 = 0.25x
= $40 = 0.03x (0.25x - 0.22x)
= 0.03x = $40
x = $40/0.03
x = $1,333.33
Question Completion:
Credit card A has an APR of 22% and an annual fee of $40, while credit card B has an APR of 25% and no annual fee.
Thus, all else being equal, at a $1,333.33 balance, the two credit cards will offer the same deal over the course of a year.
Learn more about credit card finance charges at https://brainly.com/question/22717601
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