Juanita is saving up to buy a truck. She wants to put $4000 down and borrow the rest. That down payment will lower the monthly payment so she can easily afford a new truck. She has been saving for 18 months and has half the money. It will take her about the same amount of time to save up the other half the money. Is this a good use of credit?

Question

Juanita is saving up to buy a truck. She wants to put $4000 down and borrow the rest. That down payment will lower the monthly payment so she can easily afford a new truck. She has been saving for 18 months and has half the money. It will take her about the same amount of time to save up the other half the money. Is this a good use of credit?

A. Yes, borrowing money is always good for business.
B. No, a smaller down payment would get her a new truck.
C. Yes, it is a major purchase and Juanita has figured out what she can afford.
D. No, Juanita should save for the full price of the truck no matter how long it takes.

Answer 1

C. Yes, it is a major purchase and Juanita has figured out what she can afford. By saving up half the money already and planning to save the other half before borrowing the rest, Juanita is being responsible with her finances and ensuring that she can afford the monthly payments on the loan for the new truck. This demonstrates a good use of credit as she is being financially conscious and not overextending herself.