Which of the following is a positive reason for using a credit card to finance purchases?

• A. Accumulating high-interest debt over time
• B. Building a credit history by making timely payments
• C. Increasing the risk of overspending beyond your means
• D. Paying more than the original purchase price due to interest charges

Answer: (B)

Verified step by step guidance

1. Understand the concept of credit cards: Credit cards allow individuals to borrow money up to a certain limit to make purchases, with the expectation that the borrowed amount will be repaid, often with interest.
2. Identify the potential benefits of using a credit card: One positive reason for using a credit card is the ability to build a credit history, which is essential for obtaining loans, mortgages, or other financial products in the future.
3. Recognize the importance of timely payments: Making timely payments on a credit card demonstrates financial responsibility and positively impacts your credit score, which is a key factor in building a strong credit history.
4. Evaluate the drawbacks listed in the problem: Accumulating high-interest debt, overspending beyond your means, and paying more due to interest charges are negative consequences of improper credit card use, not positive reasons.
5. Conclude that the correct positive reason for using a credit card is building a credit history by making timely payments, as this supports long-term financial health and opportunities.