Question

7.
Mikayla wants to establish good credit. Which of the following is a wise way to do that? choose all that apply

A.
Use a credit card to purchase items that she can afford to pay back before interest is added to her payments

B.
Use a credit card to purchase items even if that means she can't pay them back before interest is added to her payments

C.
Ask for a low credit card limit so she is not tempted to spend beyond her means

D.
Charge the maximum amount of her credit card limit to show future lenders that she is not afraid to take on large amounts of debt

Answer 1

Correct answers: A and C.

- A is wise: using a credit card but paying it off on time (before interest) builds a positive payment history and keeps balances low.
- C is also wise: a lower credit limit can help prevent overspending and keep your utilization manageable.
- B and D are unwise: carrying balances and maxing out cards raises utilization, can lead to missed payments and interest, and damages your credit.