Question

which of the following is not a disadvantage of using cash instead of credit?
a. using cash will not help you improve your credit rating.
b. using cash can be awkward when making large purchases.
c. using cash generally requires trips to the bank or atm to keep cash on hand.
d. using cash can make it easier to over-spend since you know exactly how much you have.

Explanation:

Analyze the question prompt

The question asks to identify which option is not a disadvantage of using cash instead of credit. This means we are looking for either an advantage of cash, a neutral statement, or a statement about cash that is logically incorrect or mischaracterized as a disadvantage.

Evaluate each option

• a. Using cash will not help you improve your credit rating. This is a true disadvantage of cash. Since cash transactions are not reported to credit bureaus, using cash does not build credit history.
• b. Using cash can be awkward when making large purchases. This is a true disadvantage of cash. Carrying large amounts of physical currency is inconvenient and poses security risks.
• c. Using cash generally requires trips to the bank or ATM to keep cash on hand. This is a true disadvantage of cash. It requires physical effort and time to replenish paper currency.
• d. Using cash can make it easier to over-spend since you know exactly how much you have. This statement is logically contradictory. Knowing exactly how much physical money you have left typically makes it harder to overspend, acting as a natural budget constraint. Credit cards, which do not show a physical depleting balance at the point of sale, are generally associated with easier overspending. Therefore, this is not a valid disadvantage of cash.

Answer:

• a. Using cash will not help you improve your credit rating.
• b. Using cash can be awkward when making large purchases.
• c. Using cash generally requires trips to the bank or ATM to keep cash on hand.
• d. Using cash can make it easier to over-spend since you know exactly how much you have. (Correct answer)