Madison wants to buy a used car. She has a credit card with a $12,000 limit and 12% interest rate, or she can get a personal loan from the bank at 7% interest for 3 years. What is the most financially responsible decision? Why?
A.
personal loan because it has a lower interest rate
B.
credit card because it has a $12,000 limit
C.
personal loan because it has a higher interest rate
If the personal loan has the same starting balance as the credit card, then the loan would be the most responsible decision because it has a lower interest rate which means she'll owe less than if she were to use a credit card.
