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The recent interest among credit card issuers in establishing credit

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The recent interest among credit card issuers in establishing credit [#permalink] New post   Updated on: 03 Jul 2021, 04:51
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The recent interest among credit card issuers in establishing credit card use in the province of Lijau is perplexing. Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average, and most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.

Which of the following, if true, would most support a prediction of success of the credit card issuers in establishing credit card use in the province of Lijau?

(A) Lijau is the richest province in the country.

(B) Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.

(C) Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.

(D) Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.

(E) In the modern economy, credit cards are associated with both prestige and convenience.

Show Spoiler
Solution: C

Start by identifying the conclusion, which is elusive in this question: this is one of those Strengthen questions with a P word (“prediction”) in the stem, so the conclusion is actually hidden in the stem rather than the stimulus: “The credit card issuers may successfully establish credit card use in Lijau.”

Our argument told us that credit cards were unlikely to succeed in Lijau because of the high rate of savings, so we need some premise that attacks that, making (C) the best answer: if the other provinces now in the grip of the credit card companies once had a high rate of savings too, there is at least a chance that Lijau will follow their example.
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C

Originally posted by Game on 25 Jun 2014, 14:31.
Last edited by Bunuel on 03 Jul 2021, 04:51, edited 1 time in total.
Edited the question.
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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   25 Jun 2014, 21:16
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Game wrote:
The recent interest among credit card issuers in establishing credit card use in the province of Lijau is perplexing. Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average, and most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.

Which of the following, if true, would most support a prediction of success of the credit card issuers in establishing credit card use in the province of Lijau?

A. Lijau is the richest province in the country.
B. Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.
C. Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.
D. Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.
E. In the modern economy, credit cards are associated with both prestige and convenience.



This is a strengthen question and hence the options provided will bring some new information to make the success of the plan more believable

St A: Being richest province does not mean credit card company decision will lead to success.What if people don't like using credit cards at all and hence have no idea how a card works

St B: Lijau does not allow its residents to declare bankruptcy..Yes this information will be strengthener so we can hold this option and come back to it later

StC: So here Lijau is linked to other provinces and these province also had the same discretionary income or excess....Now this option indicates that credit card companies in the past achieved success and thus very like can expect same story in Lijau...Good option...Let's hold onto this

StD: We don't know how many wealthy citizens and hence we don't know if it will be a success because we still don't know what size of province popluation is reach. If this category forms 95% of the population then it can be a success but if it is 1% of the population then the plan may not be a success

St E, We don't know if the province is modern or not..

Now Option C gives you information that success was achieved in the past and how in the earlier provinces credit card companies achieved success and hence is more strengthening the Option B which says the current rule..What if the local govt changes the law in future or if the govt is already studying a proposal for allowing citizens to declare bankruptcy..We don't know...We will need more information for this option to be more strong strengthener
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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   17 Jan 2019, 08:25
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Game wrote:
The recent interest among credit card issuers in establishing credit card use in the province of Lijau is perplexing. Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average, and most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.

Which of the following, if true, would most support a prediction of success of the credit card issuers in establishing credit card use in the province of Lijau?

(A) Lijau is the richest province in the country.

(B) Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.

(C) Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.

(D) Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.

(E) In the modern economy, credit cards are associated with both prestige and convenience.

Show Spoiler
Solution: C

Start by identifying the conclusion, which is elusive in this question: this is one of those Strengthen questions with a P word (“prediction”) in the stem, so the conclusion is actually hidden in the stem rather than the stimulus: “The credit card issuers may successfully establish credit card use in Lijau.”

Our argument told us that credit cards were unlikely to succeed in Lijau because of the high rate of savings, so we need some premise that attacks that, making (C) the best answer: if the other provinces now in the grip of the credit card companies once had a high rate of savings too, there is at least a chance that Lijau will follow their example.

Our argument told us that credit cards were unlikely to succeed in Lijau because of the high rate of savings, so we need some premise that attacks that, making (C) the best answer: if the other provinces now in the grip of the credit card companies once had a high rate of savings too, there is at least a chance that Lijau will follow their example.


Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average.
Most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.
Then it's odd that credit card companies are trying to establish themselves here.

What would support the success of credit card? The argument has given two reasons why the credit card is likely to fail. We need to say why that may not be the case.

(A) Lijau is the richest province in the country.

We don't know how that affects credit card success.

(B) Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.

This is one reason why cards may not become popular. If bankruptcy can be declared, then taking credit becomes more attractive.

(C) Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.

This is relevant. One reason given that credit cards may fail is that Lijau has high saving rate. This tells us that others with even higher previous saving rates have high credit card use. So in itself, the first reason given becomes weak invalid. The first reason does not need any other condition to be met. The reason is simply "high saving rate". This tells us that "high saving rate" may not be a valid reason. Hence this supports the success of credit card. Note that it does not establish the success. It just supports. Let's see remaining options.

(D) Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.
The credit card companies are trying to establish the credit card industry. This talks about whatever is already prevalent in Lijau. So it doesn't tell us what to expect in future.

(E) In the modern economy, credit cards are associated with both prestige and convenience.
These are the pros of credit cards. How they will impact people of Lijau, we do not know. Hence it doesn't tip the scale in favour of credit cards.

Answer (C)
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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   26 Jun 2014, 11:45
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WoundedTiger wrote:
Game wrote:
The recent interest among credit card issuers in establishing credit card use in the province of Lijau is perplexing. Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average, and most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.

Which of the following, if true, would most support a prediction of success of the credit card issuers in establishing credit card use in the province of Lijau?

A. Lijau is the richest province in the country.
B. Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.
C. Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.
D. Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.
E. In the modern economy, credit cards are associated with both prestige and convenience.


This is a strengthen question and hence the options provided will bring some new information to make the success of the plan more believable

St A: Being richest province does not mean credit card company decision will lead to success.What if people don't like using credit cards at all and hence have no idea how a card works

St B: Lijau does not allow its residents to declare bankruptcy..Yes this information will be strengthener so we can hold this option and come back to it later

StC: So here Lijau is linked to other provinces and these province also had the same discretionary income or excess....Now this option indicates that credit card companies in the past achieved success and thus very like can expect same story in Lijau...Good option...Let's hold onto this

StD: We don't know how many wealthy citizens and hence we don't know if it will be a success because we still don't know what size of province popluation is reach. If this category forms 95% of the population then it can be a success but if it is 1% of the population then the plan may not be a success

St E, We don't know if the province is modern or not..

Now Option C gives you information that success was achieved in the past and how in the earlier provinces credit card companies achieved success and hence is more strengthening the Option B which says the current rule..What if the local govt changes the law in future or if the govt is already studying a proposal for allowing citizens to declare bankruptcy..We don't know...We will need more information for this option to be more strong strengthener



But where does the argument guarantee the past success of credit card usage in other provinces of the country?
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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   26 Jun 2014, 14:35
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WoundedTiger wrote:
Game wrote:
The recent interest among credit card issuers in establishing credit card use in the province of Lijau is perplexing. Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average, and most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.

Which of the following, if true, would most support a prediction of success of the credit card issuers in establishing credit card use in the province of Lijau?

A. Lijau is the richest province in the country.
B. Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.
C. Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.
D. Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.
E. In the modern economy, credit cards are associated with both prestige and convenience.



This is a strengthen question and hence the options provided will bring some new information to make the success of the plan more believable

St A: Being richest province does not mean credit card company decision will lead to success.What if people don't like using credit cards at all and hence have no idea how a card works

St B: Lijau does not allow its residents to declare bankruptcy..Yes this information will be strengthener so we can hold this option and come back to it later

StC: So here Lijau is linked to other provinces and these province also had the same discretionary income or excess....Now this option indicates that credit card companies in the past achieved success and thus very like can expect same story in Lijau...Good option...Let's hold onto this

StD: We don't know how many wealthy citizens and hence we don't know if it will be a success because we still don't know what size of province popluation is reach. If this category forms 95% of the population then it can be a success but if it is 1% of the population then the plan may not be a success

St E, We don't know if the province is modern or not..

Now Option C gives you information that success was achieved in the past and how in the earlier provinces credit card companies achieved success and hence is more strengthening the Option B which says the current rule..What if the local govt changes the law in future or if the govt is already studying a proposal for allowing citizens to declare bankruptcy..We don't know...We will need more information for this option to be more strong strengthener


I think your logic associated with B is a little out of order (I just think so).

B. Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.

This is a weakener and not a strengthener.

If Lijau does not allow its residents to declare bankruptcy to avoid debt obligations, that means even if you are BANKRUPT you would still have to pay the amount you owe to the bank. Which is very negative proposition. Whereas in other provinces if you can declare bankruptcy and AVOID DEBT OBLIGATION, then it is an incentive. So surely what B mentions, works against the plan.

Let me know about your thoughts on it!
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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   26 Jun 2014, 23:02
cssk wrote:
WoundedTiger wrote:
Game wrote:
The recent interest among credit card issuers in establishing credit card use in the province of Lijau is perplexing. Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average, and most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.

Which of the following, if true, would most support a prediction of success of the credit card issuers in establishing credit card use in the province of Lijau?

A. Lijau is the richest province in the country.
B. Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.
C. Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.
D. Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.
E. In the modern economy, credit cards are associated with both prestige and convenience.


This is a strengthen question and hence the options provided will bring some new information to make the success of the plan more believable


St A: Being richest province does not mean credit card company decision will lead to success.What if people don't like using credit cards at all and hence have no idea how a card works

St B: Lijau does not allow its residents to declare bankruptcy..Yes this information will be strengthener so we can hold this option and come back to it later

StC: So here Lijau is linked to other provinces and these province also had the same discretionary income or excess....Now this option indicates that credit card companies in the past achieved success and thus very like can expect same story in Lijau...Good option...Let's hold onto this

StD: We don't know how many wealthy citizens and hence we don't know if it will be a success because we still don't know what size of province popluation is reach. If this category forms 95% of the population then it can be a success but if it is 1% of the population then the plan may not be a success

St E, We don't know if the province is modern or not..

Now Option C gives you information that success was achieved in the past and how in the earlier provinces credit card companies achieved success and hence is more strengthening the Option B which says the current rule..What if the local govt changes the law in future or if the govt is already studying a proposal for allowing citizens to declare bankruptcy..We don't know...We will need more information for this option to be more strong strengthener



But where does the argument guarantee the past success of credit card usage in other provinces of the country?



For strgenthen question it is not necessary for answer choice to guarantee the outcome or conclusion but the answer choice should make the conclusion more possible..C does just that....
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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   26 Jun 2014, 23:09
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gauravkaushik8591 wrote:
WoundedTiger wrote:
Game wrote:
The recent interest among credit card issuers in establishing credit card use in the province of Lijau is perplexing. Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average, and most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.

Which of the following, if true, would most support a prediction of success of the credit card issuers in establishing credit card use in the province of Lijau?

A. Lijau is the richest province in the country.
B. Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.
C. Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.
D. Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.
E. In the modern economy, credit cards are associated with both prestige and convenience.



This is a strengthen question and hence the options provided will bring some new information to make the success of the plan more believable

St A: Being richest province does not mean credit card company decision will lead to success.What if people don't like using credit cards at all and hence have no idea how a card works

St B: Lijau does not allow its residents to declare bankruptcy..Yes this information will be strengthener so we can hold this option and come back to it later

StC: So here Lijau is linked to other provinces and these province also had the same discretionary income or excess....Now this option indicates that credit card companies in the past achieved success and thus very like can expect same story in Lijau...Good option...Let's hold onto this

StD: We don't know how many wealthy citizens and hence we don't know if it will be a success because we still don't know what size of province popluation is reach. If this category forms 95% of the population then it can be a success but if it is 1% of the population then the plan may not be a success

St E, We don't know if the province is modern or not..

Now Option C gives you information that success was achieved in the past and how in the earlier provinces credit card companies achieved success and hence is more strengthening the Option B which says the current rule..What if the local govt changes the law in future or if the govt is already studying a proposal for allowing citizens to declare bankruptcy..We don't know...We will need more information for this option to be more strong strengthener


I think your logic associated with B is a little out of order (I just think so).

B. Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.

This is a weakener and not a strengthener.

If Lijau does not allow its residents to declare bankruptcy to avoid debt obligations, that means even if you are BANKRUPT you would still have to pay the amount you owe to the bank. Which is very negative proposition. Whereas in other provinces if you can declare bankruptcy and AVOID DEBT OBLIGATION, then it is an incentive. So surely what B mentions, works against the plan.

Let me know about your thoughts on it!



Okay...Consider from the credit card company point of view...if the province does not allow you to declare bankruptcy and avoid debt obligations, in this case to credit card companies, then it is expected that credit card users will be careful in their usage of the card and try to avoid getting into a situation where they have to declare bankruptcy and still meet debt obligations...as a credit card company this should give you some confidence that chances of getting back dues on credit card much more possible...
Downside to the above chances is that people in that province will avoid getting a credit card because of this law. Why...Because people will like to avoid a new debt obligation in the form of credit card....so it can be a weakner...
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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   04 Mar 2016, 03:59
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The recent interest among credit card issuers in establishing credit card use in the province of Lijau is perplexing. Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average, and most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.


Option C. Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.
Correct ,because it conveys that before introduction of credit cards, rest of the provinces had higher income savings than Lijau, but after introduction of credit cards pepole started spending rather than saving. So if introduced in Lijau, the people are going to spend more obviously through credit cards.
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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   30 Sep 2016, 08:02
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Can you please throw light on option C. Where in the argument are we given the hint that other provinces habit are similar to Lijau? Even if we are looking for a weakener, I believe relevant outside information will add to the case. However, I don't see anything common in between Lijau and other provinces. Just that they are the part of the same country. Please if you can share your opinion.
Many thanks in advance.
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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   30 Sep 2016, 11:05
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Keats wrote:
VeritasPrepKarishma
Can you please throw light on option C. Where in the argument are we given the hint that other provinces habit are similar to Lijau? Even if we are looking for a weakener, I believe relevant outside information will add to the case. However, I don't see anything common in between Lijau and other provinces. Just that they are the part of the same country. Please if you can share your opinion.
Many thanks in advance.


The issue here is the difference between possessing a Credit Card ( Without Actually using it ) and Purchasing Goods/Services using Credit Card ( Actual Usage )

Quote:
C. Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.


(C) states that before credit card usage in rest of the country’s provinces had similar condition as that of Lijau; however after widespread usage of credit card in other provinces their average discretionary income usage changed. This means that other provinces started using Credit Cards more , i.e, people in other provinces started purchases on credit more than they would have , borrowing money from others...

A similar trend may be observed in Lijau, thus (C) is correct...
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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   03 Jul 2021, 04:19
VeritasKarishma wrote:
Game wrote:
The recent interest among credit card issuers in establishing credit card use in the province of Lijau is perplexing. Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average, and most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.

Which of the following, if true, would most support a prediction of success of the credit card issuers in establishing credit card use in the province of Lijau?

(A) Lijau is the richest province in the country.

(B) Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.

(C) Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.

(D) Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.

(E) In the modern economy, credit cards are associated with both prestige and convenience.

Show Spoiler
Solution: C

Start by identifying the conclusion, which is elusive in this question: this is one of those Strengthen questions with a P word (“prediction”) in the stem, so the conclusion is actually hidden in the stem rather than the stimulus: “The credit card issuers may successfully establish credit card use in Lijau.”

Our argument told us that credit cards were unlikely to succeed in Lijau because of the high rate of savings, so we need some premise that attacks that, making (C) the best answer: if the other provinces now in the grip of the credit card companies once had a high rate of savings too, there is at least a chance that Lijau will follow their example.

Our argument told us that credit cards were unlikely to succeed in Lijau because of the high rate of savings, so we need some premise that attacks that, making (C) the best answer: if the other provinces now in the grip of the credit card companies once had a high rate of savings too, there is at least a chance that Lijau will follow their example.


Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average.
Most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.
Then it's odd that credit card companies are trying to establish themselves here.

What would support the success of credit card? The argument has given two reasons why the credit card is likely to fail. We need to say why that may not be the case.

(A) Lijau is the richest province in the country.

We don't know how that affects credit card success.

(B) Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.

This is one reason why cards may not become popular. If bankruptcy can be declared, then taking credit becomes more attractive.

(C) Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.

This is relevant. One reason given that credit cards may fail is that Lijau has high saving rate. This tells us that others with even higher previous saving rates have high credit card use. So in itself, the first reason given becomes weak invalid. The first reason does not need any other condition to be met. The reason is simply "high saving rate". This tells us that "high saving rate" may not be a valid reason. Hence this supports the success of credit card. Note that it does not establish the success. It just supports. Let's see remaining options.

(D) Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.
The credit card companies are trying to establish the credit card industry. This talks about whatever is already prevalent in Lijau. So it doesn't tell us what to expect in future.

(E) In the modern economy, credit cards are associated with both prestige and convenience.
These are the pros of credit cards. How they will impact people of Lijau, we do not know. Hence it doesn't tip the scale in favour of credit cards.

Answer (C)


W.r.t to the option B.

Isn't the line of reasoning from the perspective of a credit card issuer? If bankruptcy is not allowed it would be more beneficial for the credit card issuer and their decision of entering Lijau would be explained
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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   07 Aug 2021, 23:31
VeritasKarishma wrote:
Game wrote:
The recent interest among credit card issuers in establishing credit card use in the province of Lijau is perplexing. Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average, and most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.

Which of the following, if true, would most support a prediction of success of the credit card issuers in establishing credit card use in the province of Lijau?

(A) Lijau is the richest province in the country.

(B) Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.

(C) Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.

(D) Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.

(E) In the modern economy, credit cards are associated with both prestige and convenience.

Show Spoiler
Solution: C

Start by identifying the conclusion, which is elusive in this question: this is one of those Strengthen questions with a P word (“prediction”) in the stem, so the conclusion is actually hidden in the stem rather than the stimulus: “The credit card issuers may successfully establish credit card use in Lijau.”

Our argument told us that credit cards were unlikely to succeed in Lijau because of the high rate of savings, so we need some premise that attacks that, making (C) the best answer: if the other provinces now in the grip of the credit card companies once had a high rate of savings too, there is at least a chance that Lijau will follow their example.

Our argument told us that credit cards were unlikely to succeed in Lijau because of the high rate of savings, so we need some premise that attacks that, making (C) the best answer: if the other provinces now in the grip of the credit card companies once had a high rate of savings too, there is at least a chance that Lijau will follow their example.


Residents of Lijau save almost 40% of their discretionary income, a rate more than three times the national average.
Most residents of Lijau are more likely to forgo a major purchase or borrow from relatives than to rely on an outside source of funds.
Then it's odd that credit card companies are trying to establish themselves here.

What would support the success of credit card? The argument has given two reasons why the credit card is likely to fail. We need to say why that may not be the case.

(A) Lijau is the richest province in the country.

We don't know how that affects credit card success.

(B) Unlike the country’s other provinces, Lijau does not allow its residents to declare bankruptcy to avoid debt obligations.

This is one reason why cards may not become popular. If bankruptcy can be declared, then taking credit becomes more attractive.

(C) Before credit card use was established in the rest of the country’s provinces, those provinces had a rate of discretionary income saving equal to or in excess of the rate currently found in Lijau.

This is relevant. One reason given that credit cards may fail is that Lijau has high saving rate. This tells us that others with even higher previous saving rates have high credit card use. So in itself, the first reason given becomes weak invalid. The first reason does not need any other condition to be met. The reason is simply "high saving rate". This tells us that "high saving rate" may not be a valid reason. Hence this supports the success of credit card. Note that it does not establish the success. It just supports. Let's see remaining options.

(D) Lijau’s wealthiest citizens use credit cards heavily during their trips abroad.
The credit card companies are trying to establish the credit card industry. This talks about whatever is already prevalent in Lijau. So it doesn't tell us what to expect in future.

(E) In the modern economy, credit cards are associated with both prestige and convenience.
These are the pros of credit cards. How they will impact people of Lijau, we do not know. Hence it doesn't tip the scale in favour of credit cards.

Answer (C)


Hi Karishma. I have a doubt if people from that province know the effect the credit card had on other provinces savings.... Won't that serve as a deterrent in purchasing a credit card?

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Re: The recent interest among credit card issuers in establishing credit [#permalink] New post   31 Dec 2023, 03:26
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Re: The recent interest among credit card issuers in establishing credit [#permalink]
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