Credit Decision Analysis

You need a new laptop for school. Which is the better option?

• Use a credit card with 22% interest and make minimum payments.

• Save up for 2 months and buy the laptop with cash.

You’re offered two credit cards. Which should you choose?

• Card A: 15% APR, $0 annual fee

• Card B: 22% APR, $300 cashback bonus but a $95 annual fee

You’re buying a used car. Which financing option is smarter?

• 4-year loan at 6% interest from your bank

• 5-year loan at 10% interest from the dealership

Your credit card statement says your minimum payment is $40. You owe $1,200 total. You currently have $2,500 in your checking, and $4,000 in savings. Which is the better option?

• Pay only the minimum payment of $40

• Pay $200 this month to reduce the balance faster

You want to build credit. Which is the better first step?

• Get a secured credit card with a $300 limit and make small purchases you pay off monthly

• Co-sign a loan with a friend so you can build credit faster

You’re planning to buy a home in two years. Which is the smarter move for your credit score?

• Keep your oldest credit card open, even if you rarely use it

• Close old credit cards to avoid annual fees, even if they are paid off

Your credit score is 720. A store offers you 0% interest for 12 months on furniture. What’s the better move?

• Buy the furniture and pay it off within 12 months to avoid interest

• Use your regular credit card with 19% interest because it earns reward points

You want to improve your credit score. What is the better decision?

• Max out your credit card to get points and pay it off next year

• Keep your credit card balance below 30% of your limit and pay off monthly

You’re offered a $5,000 loan for home repairs. Which option saves you more money?

• Personal loan with a 7% interest rate, paid off in 2 years

• Credit card with a 24% interest rate and no set payoff time

You’re short on cash this month. Which is the smarter choice?

• Skip your credit card payment and pay late next month

• Pay at least the minimum payment to avoid a late fee and credit damage