Surname 1NameInstructorCourseDateScenario 1: Paying off Credit CardA credit card is not a wise option to buy or pay for things although they arecrucial for financial protection. In the scenario provided, the user owed a hypothetical tenthousand dollars for a used car. They relied on their credit card to pay for the automobile.Because of interest, by the time that car is paid for years later, the user will owe nearly doubletheir initial investment. For example, with an eighteen percent interest rate on a ten thousanddollar payment, the user will need to pay a minimum of two hundred dollars per month to havethe car paid for within thirteen years.If the person wanted to pay the car off within four years, he or she would have to investabout $300 per month. This is a nearly impossible payment for many families, who need thesame money for food, bill, and utilities. Thus, as this example illustrates, credit cards offermoney immediately, but they do not offer a wise way to pay for things.Despite not offering a wise way to pay for things, credit cards are necessary. People needto set limits they could afford to pay off if they are to rely on credit cards. Setting limits is ...
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