When using credit to make purchases, consumers are
A) decreasing current buying power and increasing future buying power.
B) increasing their present discretionary income to extend purchasing power.
C) putting themselves at significant risk of financial disaster.
D) forgoing the accumulation of wealth to increase current income.
E) increasing current buying power at the expense of future buying power.

Question

Quizplus · Accepted Answer

When using credit to make purchases, consumers are increasing their current buying power at the expense of future buying power. This is because they are borrowing money that they will need to pay back with interest, which reduces their future disposable income. Additionally, if the consumer is unable to make payments on the credit, it can lead to significant financial problems and even bankruptcy.

When Using Credit to Make Purchases, Consumers Are