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Thread: Credit card vs Debit card

  1. #1
    Sep 2008

    Credit card vs Debit card

    Items to be purchased:

    1. LCD TV $1799
    2. Sound System $599
    3. Front Load Washingmachine $799
    4. 610L Fridge $1599

    Total Price of Purchases: $4796

    You decided that it may be worthwhile considering the use of one of the two credit cards you have at your disposal or paying cash via your debit card (see table below). You decide that you will only purchase one item per week and you will pay your account in full when it is due. Assume the statement peroid begins at the 1st of the month

    1. Using the prices gathered above, determine the cheapest way you can make the purchases. Include all reasoning in your decisions. You can only buy one item each week.

    2. Decide which card is the most viable option to pay for both items. Your credit card accounts are due on the 1st of the month. You pay both you credit card accounts from your savings with your debit card. Your debit card has a balance of $7000 and calculates interest daily. Fully justify your answer

    I have worked out in question 1 the total amount including interest owing on credit card 1 and 2 (I used the simple interest formula S.I = PRT/100 and than worked out the total with the formula A=P + I...but thats just common sense)...but i have no idea where to go from here. I was under the impression that the debit card would accumulate interest in my favour not make me pay it?Any help would be greatly appreciated Thanks
    Last edited by wato; Mar 19th 2009 at 04:19 AM.
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