Question

22.
In which of the following situations should a person be concerned by higher interest rates? (Choose all that apply.)

A.
Using a credit card to pay for something

B.
Acquiring a mortgage to buy a house

C.
Paying cash for a new television

D.
Saving money in a savings account

Answer 1

A and B.

Higher interest rates make borrowing more expensive — so using a credit card (A) or taking out a mortgage (B) will cost you more. Paying cash (C) isn’t affected by interest rates, and higher rates generally help savers (D) because savings accounts earn more interest.