If you plan on buying a consumer item such as an automobile there are a number of ways of paying for it including cash, credit cards, and a bank loan. But which is the best way? Perhaps cash…? After all, with cash you save finance charges. But be warned, the choice is a Catch 22.

If you choose to buy on credit, for instance, you need good credit. The better your credit score the lower the rates. But if you don’t buy on credit, choosing the cash route, you don’t develop a credit history and can’t get credit when you need it.

If you decided to borrow from a lender, would you be accepted or rejected? As suggested, major factors would be your ability to pay and your credit rating.