Assume you have excellent credit. What is the most likely annual percentage rate (APR) you would receive for purchases or balance transfers on a new credit card?

• A. Around 5% APR
• B. Around 35% APR
• C. Around 25% APR
• D. Around 15% APR

Answer: (D)

Verified step by step guidance

1. Understand the concept of Annual Percentage Rate (APR): APR represents the annual cost of borrowing money, including interest and fees, expressed as a percentage. It is a key factor in determining the cost of credit card transactions.
2. Recognize that credit card APRs vary based on factors such as creditworthiness, market conditions, and the type of transaction (e.g., purchases, balance transfers). Excellent credit typically qualifies for lower APRs.
3. Analyze the options provided: Around 5% APR, Around 35% APR, Around 25% APR, and Around 15% APR. Consider which APR is most realistic for someone with excellent credit.
4. Recall that individuals with excellent credit usually receive competitive rates, which are generally lower than average APRs. Rates around 15% APR are common for purchases and balance transfers for such individuals.
5. Conclude that the most likely APR for someone with excellent credit is Around 15% APR, as it aligns with typical market rates for creditworthy borrowers.