Final answer:
Excess interest credited in a fixed-amount option indicates an interest rate above the equilibrium level, resulting in a surplus of funds available and leading to firms lowering their rates to attract borrowers.
Step-by-step explanation:
When excess interest is credited if a fixed-amount option is chosen, it implies that the interest rate is above the equilibrium level in the financial market, leading to a surplus of financial capital. At a high interest rate, such as 21%, there is an increase in the fund's supply but a decrease in the demand, as businesses and individuals become less inclined to borrow due to the high cost. To correct this imbalance, credit card companies may reduce their interest rates or other fees, driving the rate down toward the equilibrium level, increasing the attractiveness of borrowing, and normalizing the market conditions.