3. You would use words for numbers when

... when it takes more than two words to say the number.

=)

That's correct! You would use words for numbers when it takes more than two words to say the number. For example, instead of writing "1,000,000" you would write "one million." This is because it would take several words to say the number "1,000,000" and it is easier to understand when written as "one million."