Credit cards can help _____________ when paid off on time regularly.

• A. build a positive credit history
• B. reduce your credit score
• C. increase your debt burden
• D. incur late payment fees

Answer: (A)

Verified step by step guidance

1. Understand the purpose of credit cards: Credit cards are financial tools that, when used responsibly, can help individuals build a positive credit history by demonstrating their ability to manage credit effectively.
2. Analyze the options provided: The correct answer should align with the benefits of responsible credit card usage, such as building a positive credit history, rather than negative outcomes like reducing credit scores, increasing debt burden, or incurring late payment fees.
3. Focus on the condition mentioned in the problem: The phrase 'when paid off on time regularly' is key. Paying off credit card balances on time avoids late payment fees, prevents debt accumulation, and positively impacts credit scores.
4. Eliminate incorrect options: 'Reduce your credit score,' 'increase your debt burden,' and 'incur late payment fees' are all negative outcomes that occur when credit cards are mismanaged, not when they are paid off on time regularly.
5. Select the correct answer: Based on the analysis, the correct answer is 'build a positive credit history,' as timely payments demonstrate financial responsibility to credit bureaus.