Bobby is trying to decide between two credit cards. One has no annual fee and an interest rate of 18 percent, and the other has an annual fee of $35 and an interest rate of 8.2 percent.

(a) If Bobby pays his credit card balance in full each month, which card should he choose?

multiple choice 1

• He should select the card without the annual fee.

• He should most likely select the card with the lower interest rate.

(b) If Bobby just pays the minimum payment and carries a balance from one month to the next, which card should he choose?

multiple choice 2

• He should most likely select the card with the lower interest rate.

• He should select the card without the annual fee.