ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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With credit, you don’t have to pay interest
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With credit, you borrow money and repay later, with interest
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No difference
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None of the above
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Detailed explanation-1: -Paying with cash immediately subtracts a portion of your funds. And if you buy an item and pay in full, that’s the end of the transaction. A credit card lets you borrow money. When you use your credit card for purchases, your lender pays the seller for you.
Detailed explanation-2: -If you are over 18, you may be able to choose between cash and credit – before you make any decisions there are a few things you should know. The key difference between cash and credit is that one is your money (cash) and one is the bank’s (or someone else’s) money (credit).
Detailed explanation-3: -Buy now, pay later plans allow consumers to make purchases and pay for them in several installments. Credit cards also let consumers pay over time, but the only required payment is the monthly minimum due. The pros and cons of BNPL plans and credit cards depends on the consumer’s financial situation.
Detailed explanation-4: -Depending on the card, you may be able to withdraw cash by depositing it in a bank account, using your card at an ATM, or writing a convenience check. Cash advances can have higher APRs than purchases or balance transfers, and interest starts accruing on them right away. Plus they often have fees.