Which of the following statements is NOT correct?Because there is the presence of ANZ logo on John's Visa credit card,A.John has a debt with ANZ when he pays goods and services with his credit card.B.John pays interest, if any, to ANZ.C.Visa provides a loan to ANZ so that ANZ can pay on behalf of John.D.ANZ pays fees to Visa so ANZ's customer John can use his credit card
Question
Which of the following statements is NOT correct?Because there is the presence of ANZ logo on John's Visa credit card,A.John has a debt with ANZ when he pays goods and services with his credit card.B.John pays interest, if any, to ANZ.C.Visa provides a loan to ANZ so that ANZ can pay on behalf of John.D.ANZ pays fees to Visa so ANZ's customer John can use his credit card
Solution
The statement that is NOT correct is: "Visa provides a loan to ANZ so that ANZ can pay on behalf of John."
Here's why:
A. When John uses his Visa credit card to pay for goods and services, he is essentially borrowing money from ANZ, the bank that issued his card. Therefore, he does have a debt with ANZ until he pays off his credit card balance.
B. If John does not pay off his credit card balance in full by the due date, he will be charged interest by ANZ. This is how credit cards work.
C. This statement is incorrect. Visa does not provide a loan to ANZ. Instead, Visa operates the payment network that allows transactions to take place between the merchant and ANZ. When John uses his Visa card to make a purchase, ANZ pays the merchant on behalf of John, and John later repays ANZ.
D. ANZ does pay fees to Visa for using their payment network. These fees are part of the cost of providing credit card services to customers like John.
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