Savings rates are interest you earn on money in a Savings account. These rates are currently less than 1% per year. Therefore, $100 left in a Saving account on Jan 1, will be worth $101 on Dec 31st. Credit card rates average around 18% + fees and expenses. Therefore a purchase of $100 on Jan 1 will cost you $118 if not paid before Dec 31st. This means that you would need $1,800 in a savings account to pay for the interest on just a $100 credit card purchase.

Question 1: In your ideal investment plan, when would using a credit card to make a purchase be financially responsible? By the way, 90% of consumers who THINK they will pay it off, do NOT. 

Question 2: Check cashing has become a popular way of paying bills. If you get paid on the 1st of each month, the check cashing store will advance you a portion (up to $250) provided you pay back the loan PLUS interest on the 1st of next month. Research the interest rate for this service. State the Company, Interest Rate, and maximum loan amount.

Answer rating: 100% (QA)

1 Using a credit card to make a purchase is not an option if you are concerned about being fina... View the full answer