Final answer:
Using a credit card that provides air miles and charging over $2,000 per month are not independent events. It's crucial to pay off credit card balances monthly to avoid substantial interest charges, and having savings alongside high-interest credit card debt may not be financially wise.
Step-by-step explanation:
The question of whether using a credit card that provides a mile of air travel for every dollar spent and charging more than $2,000 per month are independent events can be addressed using probability concepts.
Based on the provided information, 35% of respondents use such a credit card, and among those who charge more than $2,000, 80% use this type of card. Since the probability of using the mile-earning card is different for those who charge more than $2,000 compared to the general population, these events are not independent.
Furthermore, the importance of paying off credit card balances each month cannot be overstated. Carrying a balance results in interest charges, which can quickly outweigh any rewards earned, like air miles or free items. Especially with average interest rates around 15% annually, the financial wisdom of having savings while carrying a high-interest credit card balance is questionable, as it can lead to a net financial loss.