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qwelly [4]
3 years ago
7

James stopped making payments on a credit card when he was in college. When applying for a car loan after graduation, he realize

s the missed payments have caused negative marks on his credit report and he only qualifies for a high interest rate loan. James decides against purchasing the car and makes payments on his old credit card. Evaluate James's decision.
Mathematics
1 answer:
wolverine [178]3 years ago
5 0

Answer:

Here, James took the right decision. I will clarify this with few points.

1st - If he purchases a car at high interest rate, he will still have all his debt on previous credit card standing as it is. He will have to pay car loan plus his older dues thus paying at double places.

2nd - It is likely that he can still default on loans as paying double money each month can create problems and James can again stop making payments.

3rd - If James starts paying his debts now, he can be free in a few years time and his credit score will again become good. Then he will get the regular rate of interest for his car as he will be debt free.

So, we can say, he made the right decision.

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