OpenStudy (anonymous):

Buying things with credit means you are financially irresponsible never truly own the item pay less for the item overall pay more for the item overall is it A? @Whitemonsterbunny17

2 years ago
OpenStudy (anonymous):

not very good at this stuff

2 years ago
OpenStudy (anonymous):

I think its tha first one

2 years ago
whitemonsterbunny17 (whitemonsterbunny17):

I'm not sure about this one, sorry.

2 years ago
OpenStudy (anonymous):

its fine is it okay if you could please tag someone?

2 years ago
whitemonsterbunny17 (whitemonsterbunny17):

Hrm... maybe @e.mccormick could help.

2 years ago
OpenStudy (e.mccormick):

It may or may not be A, but there is one that is always true.

2 years ago
OpenStudy (anonymous):

which one

2 years ago
OpenStudy (e.mccormick):

Well, what about each one sounds true or false and why? For example: are financially irresponsible - False because that depends on if you buy responsibly and pay it off in a reasonable time.

2 years ago
OpenStudy (e.mccormick):

Now for "never truly own the item" Lets say you buy a car and pay it off. Do you ever own the car?

2 years ago
OpenStudy (anonymous):

idk.. i've never experienced any of this stuff.. thats why i'm having so much trouble and really need help @e.mccormick

2 years ago
OpenStudy (e.mccormick):

When you buy a car on credit, the lease company gets the pink slip (ownership) as a lien holder. But once you pay it off they relese the lien and you are sole owner. As another example, you buy food with a credit card. You eat the food. It is done, gone, and everything. You owned that food as much as any other food you bought. No matter if you liked the foold or not it is gone now and you must repay the credit card company for the price plus interest. Credit does not eliminate ownership in these two cases. It modifies it in the first and does basically nothing in the second.

2 years ago
OpenStudy (anonymous):

so u do own it.

2 years ago
OpenStudy (e.mccormick):

Exactly, so "never truly own the item" is false. That leaves: pay less for the item overall pay more for the item overall Those two are opposites. So, any idea which is true and why?

2 years ago
OpenStudy (anonymous):

pay more for the item overall??

2 years ago
OpenStudy (e.mccormick):

Yes. And know why?

2 years ago
OpenStudy (anonymous):

because of taxes and all?

2 years ago
OpenStudy (e.mccormick):

You pay taxes no matter what, but there is simething else. Credit, no matter if it is store credit or a card or a loan, has interest. You always pay the total price + interest vs. a cash purchace is just the total price. (total price is after tax)

2 years ago
OpenStudy (anonymous):

okay i do think that that is definitely the answer.. cuz A is only based on certain people and not everyone who uses a credit card

2 years ago
OpenStudy (e.mccormick):

Exactly! And lets say you need a car to keep your job. Is it more irresponsible to keep your job and use credit to buy a new car or to dump the job and find a new one you can walk to? Obviously it is a problem if you switch jobs like that so it is a good time to use credit.

2 years ago
OpenStudy (anonymous):

exactly wooow!! u made me understand this so much better thank you so much!!

2 years ago
OpenStudy (e.mccormick):

I try. =) Makes it easier to remember when you understand the why.

2 years ago
OpenStudy (anonymous):

yes it does!! do u mind keeping an eye out for more questions from me?

2 years ago
OpenStudy (e.mccormick):

Interest is evil. Well, paying it out is... but it is a necessary evil. It is hard to buy thing like a car or a house and it is dangerous to carry thousands of dollars for say getting a new refrigerator, microwave, etc for a kitchen. So credit lets you deal with these issues if you are responsible and don't mindlessly use it. You can tag me. Sometimes I am busy or AFK, but you can always tag and see.

2 years ago
OpenStudy (anonymous):

okay thanks heres another It would be least expensive to purchase goods with installment credit cash a personal loan a credit card

2 years ago
OpenStudy (e.mccormick):

Well, think about why the last one was what it was... What did I say was always cheaper than credit?

2 years ago
OpenStudy (anonymous):

a loan?

2 years ago
OpenStudy (e.mccormick):

"You pay taxes no matter what, but there is simething else. Credit, no matter if it is store credit or a card or a loan, has interest. You always pay the total price + interest vs. a cash purchace is just the total price. (total price is after tax)"

2 years ago
OpenStudy (e.mccormick):

BTW: installement credit = store credit

2 years ago
OpenStudy (anonymous):

then it is installement credit

2 years ago
OpenStudy (e.mccormick):

That is a form of credit and therefore has interest. What is the one thing that I said did not have interest?

2 years ago
OpenStudy (anonymous):

cash

2 years ago
OpenStudy (e.mccormick):

Exactly. Cash is always king because it has no hidden costs. Credit, no matter what type it is, always has some extra fee hidden in there at some point.

2 years ago
OpenStudy (anonymous):

hahah truuee thanksss!!

2 years ago
OpenStudy (e.mccormick):

If you can remember "Cash is king" it will help you remember what has the most buying power and least strings attached. Sometimes an image is best for this: http://yourpfpro.com/wp-content/uploads/2013/04/Cash_is_king_for_small_businesses.jpg A little doodle can even help you remember things. I have made doodled cartoons to remember things for a philosophy class and got As on every test, quiz, etc.

2 years ago
OpenStudy (anonymous):

Credit Card 1 Credit Card 2 Credit Card 3 Secured Unsecured Unsecured Limit $1,000 Fixed interest rate 8% No rewards Limit $1,000 Fixed interest rate 10% No rewards Limit $2,000 Variable interest rate, starting at 6.5% Rewards The chart above compares credit card offers. Which option for Credit Card 3 should make consumers the most cautious? Higher limit Rewards incentives Unsecured credit Variable interest rate @e.mccormick this is sooooo CONFUSIIINGG!

2 years ago
OpenStudy (e.mccormick):

OK, well, there are 4 possible things. Higher limit, Rewards incentives, Unsecured credit, and Variable interest rate. They say "Which option for Credit Card 3 should make consumers the most cautious?" and the key word is cautious! You are cautious when something is dangerous. So, which of those is dangerous or somehow bad?

2 years ago
OpenStudy (e.mccormick):

Higher limit = You can spend more money. Rewards incentives = They give you perks for using the cad, like little gifts or cash back. Unsecured credit = If you do not pay them they have little recourse. They \(\textbf{can't}\) take your home or car. Variable interest rate = The interest you pay can change typically it goes up so you pay more.

2 years ago
OpenStudy (anonymous):

variable interest rate?

2 years ago
OpenStudy (e.mccormick):

Yes! Variable rates are dangerous. Here are two examples. Lets say you have a card with a 6 month introductory rate of 4%. After 6 months it goes up to 14%. While those 6 months are happening you get used to using that card because it is so cheap. Then it becomes the thing yo pull out most often. Finally, the rate goes up but you are still used to paying with that card so you keep using it even though it is now your most expensive card. Lets say you have a variable rate that is tied to the prime rate. When it is low you use it a lot. Then lets say the prime rate goes up because of inflation. Suddenly your money buys less and the things you bought before but ha not paid off will have higher interest fees!

2 years ago
OpenStudy (anonymous):

so that is my answer right?

2 years ago
OpenStudy (e.mccormick):

Yep! That is 100% right. The variable rate, especially because it says " starting at 6.5%" is a warning sign. "Starting at" means it WILL change!

2 years ago
OpenStudy (anonymous):

yayayy!! thxx!

2 years ago
OpenStudy (e.mccormick):

On a personal note, I HATE reward system. Why? THEY LIE! They say you "earn" rewards by using the card. However, you pay to use the card. Therefore you are buying rewards and they cost you money to get. There is nothing earned when you buy it. They also cost more than they are worth! What you pay to get a reward is more than you get back. Many rewards are of limited use. Even cash back rewards can't be cashed out until you reach a certain amount. So they make sure you can't just use it easily. All in all, "rewards" is just marketing junk to fool people into think that credit cards are good.

2 years ago
OpenStudy (anonymous):

oh woow

2 years ago
OpenStudy (e.mccormick):

Yah. People forget that when they see those adds, "So and so EARNED all these rewards..." No they did not! They BOUGHT those rewards by using the card. It is ALWAYS better to pay cash if you have the option. Save up and pay cash is never a bad thing to do and the more you do that the less you get in financial trouble. Anyhow, I am going to sneak off and go home. Don't have too much fun.

2 years ago
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