CHAPTER 6 HW - Karina Santana Personal Finance Chapter 6-...

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Karina Santana Personal Finance Chapter 6- Problems and activities 1 PROBLEM: Ted argues that Mitch is blind to the convenience and controlled offer by cash advantages, as research shows that people tend to spend more when using credit cads. Tiffany and Amber ask you to determine who is right, but you must thoroughly defend your answer to settle the argument. In this situation I will completely agree with Ted whose argument is that Mitch is blinded by the convenience of using a credit card and because of this he spends more. The first reason why I agree with Ted is because since the beginning of this chapter we learn that when credit cards allow you to take cash advance it means that you are taking out a loan in which you immediately pay interest on it as soon as you withdraw the money from the ATM machine. These cash advance opportunity will come out very costly to Mitch because not only is he immediately paying interest on that money, but that money is also charged interest higher than what he would have paid if he had made a
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This note was uploaded on 10/12/2011 for the course BUSN 2300 taught by Professor Davidoff during the Fall '11 term at CUNY Brooklyn.

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CHAPTER 6 HW - Karina Santana Personal Finance Chapter 6-...

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