Why might it be better to save up some money and buy something later than to buy it on credit now?
You may get protection for purchases that are lost, damaged, or stolen.
Buying anything on credit will damage your credit rating.
Paying for things on credit will hurt the economy, by taking money out of circulation.
Paying off credit debt can extend many years, long after the item purchased was useful.
And your answer is?
No.
The only other answer that makes sense to me is D
Yes. D is correct. Many people have to declare bankruptcy because their credit card debt is too high for them to pay.
Also -- the fact that credit cards charge at least 18% interest per year on the unpaid balance means that the debtor could pay double or more for their purchases.
Saving up money and buying something later rather than buying it on credit now may be a better option for several reasons:
1. Financial responsibility: Saving up money and paying for something in cash demonstrates good financial discipline and responsibility. It allows you to have a clear understanding of your expenses and helps you avoid accumulating unnecessary debt.
2. Avoiding interest and fees: When you use credit to make a purchase, you often have to pay interest and fees on the borrowed amount. By saving up and paying with cash, you can avoid these additional costs and potentially save a significant amount of money in the long run.
3. Protecting your credit rating: Whenever you make a credit purchase, it gets recorded on your credit report. This impacts your credit score, and if you have a high amount of debt or missed payments, it can negatively affect your credit rating. By saving up and paying with cash, you can maintain a healthy credit profile.
4. Protecting your purchases: Some credit cards offer purchase protection, which can provide coverage for lost, damaged, or stolen items. However, it's important to note that these protections vary by credit card and may not cover all situations. By saving up and paying with cash, you can still protect your purchases by opting for insurance or warranty coverage.
5. Avoiding long-term debt: When you make a purchase on credit, you're essentially borrowing money that needs to be paid back over time. This can lead to paying off debt for an extended period, long after the item you purchased may have lost its usefulness. By saving up and buying with cash, you can avoid accumulating unnecessary debt and enjoy the peace of mind that comes with being debt-free.
Overall, the choice between saving up and buying later or using credit depends on your financial situation, personal discipline, and the specific benefits or protections offered by each method of payment. It's important to consider these factors and make an informed decision based on your individual circumstances.