Which best describes how a credit card works? a. The credit card company extendsyou a line of credit. You then pay a small percentage of the cost of those purchases in one annual payment. b. The credit card company extends you a line of credit. You purchase "stuff" and the purchase gets directly paid with funds in your checking account. c. The credit card company extends you a line of credit. This is free money that you car use to purchase the "stuff" that you need. d. The credit card company extends you a line of credit. You purchase "stuff" and then have the choice to pay the balance in full or a minimum payment each month.

The best description of how a credit card works is: **d. The credit card company extends you a line of credit. You purchase "stuff" and then have the choice to pay the balance in full or a minimum payment each month.** **Explanation:** - **Line of Credit:** Credit cards provide a revolving line of credit up to a certain limit. - **Purchases:** When you make a purchase, you're borrowing money from the credit card issuer. - **Payment Options:** Each month, you can choose to pay off the entire balance (avoiding interest) or make a minimum payment, with the remaining balance accruing interest. **Why the Other Options Are Less Accurate:** - **a.** Payments are typically made monthly, not annually. - **b.** Credit card purchases are not directly paid from your checking account; that's how debit cards work. - **c.** Credit is not "free money" because interest and fees can apply if you don't pay the balance in full.