LSAT Explanation PT 26, S3, Q25: Credit card companies justify charging cardholders

LSAT Question Stem

The principle invoked by the credit card companies would, if established, be most usefully invoked in which one of the following arguments? 

Logical Reasoning Question Type

This is a Principle (Misc) question. 

Correct Answer

The correct answer to this question is B. 

LSAT Question Complete Explanation

In the given passage, credit card companies justify charging additional fees for late payments by asserting the principle that those who expose others to financial risk should pay for that risk. They argue that late-paying cardholders present a greater risk of default than other cardholders, and without late fees, the cost of this risk would have to be spread over all cardholders.

The question type is a Principle (Misc) question, and it asks us to identify which of the answer choices would most usefully invoke the principle mentioned by the credit card companies.

Let's analyze each answer choice:

a) This answer choice discusses student-caused damages to school property and suggests using student activity funds for payment. However, it does not specifically address the principle of those who expose others to financial risk paying for that risk. Instead, it focuses on the difficulty of determining which students caused the damage.

b) This answer choice suggests that insurance companies should charge higher rates for sports car drivers because they are more likely to cause accidents and require the companies to pay out money in claims. This aligns with the principle that those who expose others to financial risk should pay for that risk. In this case, sports car drivers present a greater risk of financial cost (in the form of insurance claims) than other drivers, and thus, they should be the ones paying higher insurance rates.

c) This answer choice discusses libraries charging high fines for overdue books to prevent people from keeping books out indefinitely. While it does address the risk of inconvenience to other library users, it does not specifically address the principle of those who expose others to financial risk paying for that risk. The focus here is on preventing inconvenience, not on compensating for financial risk.

d) This answer choice suggests imposing high fines for littering because the risk of getting caught is low. However, it does not address the principle of those who expose others to financial risk paying for that risk. The focus here is on deterring people from littering, not on compensating for financial risk.

e) This answer choice discusses using tax money for the maintenance of municipal roads. It does not address the principle of those who expose others to financial risk paying for that risk. Instead, it focuses on the maintenance of important roads in remote areas.

Based on our analysis, answer choice B aligns best with the principle mentioned by the credit card companies, as it involves the idea of those who expose others to financial risk (in this case, sports car drivers) paying for that risk (in the form of higher insurance rates).