To have a smoothie with breakfast more regularly, Jordan decides to buy a new blender that cost $59. Jordan can pay with cash, by debit card, or by credit card. Compare and contrast the payment methods Jordan must choose among. Decide which one will help Jordan avoid paying potential fees or interest on the purchase
When deciding between cash, debit card, and credit card to pay for the blender, it is essential to consider potential fees or interest that Jordan might incur.
1. Cash: If Jordan pays with cash, there will be no additional fees or interest involved. Cash transactions are straightforward, and there won't be any debt incurred. However, Jordan needs to plan and have enough cash on hand to make the purchase. Additionally, paying with cash does not provide any additional benefits like rewards or cashback.
2. Debit Card: Paying with a debit card allows Jordan to make the purchase directly from their bank account. Similar to cash, there will be no interest involved. However, Jordan needs to ensure that they have sufficient funds in their account to cover the purchase. Using a debit card won't accumulate any debt, but potential overdraft fees could occur if there aren't enough funds available.
3. Credit Card: Paying with a credit card allows Jordan to make the purchase without any immediate impact on their cash flow. However, it is crucial to consider the interest rates associated with credit cards. If Jordan does not pay off the balance in full by the due date, they will accumulate interest charges, resulting in additional costs. Furthermore, if Jordan has a high credit utilization ratio, their credit score may be negatively affected. However, some credit cards offer rewards or cashback on purchases, allowing Jordan to benefit in the long run if used responsibly.
Considering the information above, paying with cash or a debit card would be the best options for Jordan to avoid potential fees or interest. Cash ensures straightforward payment without any additional charges, while a debit card allows direct payment from the bank account without accumulating debt.