Answer with its Explanation:
The result is that some of the credit cards pays interests on the cash surplus and charges interests on the cash deficit. If the interest rate is higher then the interest on the real cost of items that are finance with the negative balance will be charged interest on the higher interest rate because the interest rate is higher. If the interest rate is lower then the effect of credit card interest rate would be higher on the real cost of items.
The effect of credit card interest on the real cost of items is that it understates the real cost.
Credit card interest refers to the interest that a person is charged when the person doesn't pay off their full balance at the due date.
It should be noted that when an individual carries a credit card balance from month to month, interest will be charged on a daily basis. The effect of credit card interest on the real cost of items is that it understates the real cost.
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