PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337117005
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Question
Chapter 6, Problem 4FPE
Summary Introduction
To determine: The Person D should purchase a debit card or credit by laying down their benefits and drawbacks.
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All credit cards are not alike, nor are all spenders alike. When you are deciding which credit card to
obtain, your first step should be to honestly determine what kind of spender you are and how you
pay your bills. Then consider cards whose features best match your purchasing and payment
habits. These cards will work to your greatest advantage.
Consider the following example:
Shop Around for the Best Deal
Larry is shopping around for a credit card and does not expect to pay the balance in full
each month. Larry isn't a big spender and will carry small balances from month to month.
What is Larry's best option?
O
Pay an annual fee to keep the interest rate as low as possible
Select the card with the longest grace period regardless of its annual fee or interest rate
Avoid cards with annual fees, and get one with as low an interest rate as possible
If you were a wise credit card user, under which of the following conditions would you consider using a credit card to finance an expensive purchase?
a. If I haven't reached my credit limit and I really want to item
b.If I believe my money situation will be better (for example, a better-paying job) in the future than it is now.
c.If I have the money to pay for the item in my bank account and plan to immediately pay the balance in full.
d. If my card has good rewards on it.
Your friend is trying to establish good credit. Your friend is thinking about taking out a $15,000 auto loan to
establish some credit on his credit report. Do you think this is a good idea for your friend to do this? Do you
have an alternate suggestion? Why?
Chapter 6 Solutions
PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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