Which of These Transaction Types Decrease How Much You Owe the Credit Card Company?

Which of These Transaction Types Decrease How Much You Owe the Credit Card Company?

A) Balance Transfers

B) Cash Advances

C) Payments

D) Interest Charged

The correct answer is: (C) Payments

Among the given transaction types:

A) Balance Transfers: This involves moving debt from one credit card to another. While it might save money on interest, it doesn't directly decrease the owed amount; it simply transfers it to a different account.

B) Cash Advances: Cash advances involve borrowing cash against the credit card limit. This increases the owed amount as it's essentially a loan from the credit card company.

C) Payments: Making payments, also known as credit transactions, decreases the amount owed. When you pay off your credit card balance, you're reducing the debt you owe to the credit card company.

D) Interest Charged: Interest charged represents the cost of borrowing money on the credit card. While it doesn't directly decrease the owed amount, it's an additional cost added to the total debt.

Payments (Option C) are the only transaction type among the given options that decrease how much you owe the credit card company. When you make payments, you're reducing your outstanding balance, effectively decreasing the amount you owe.