GMAT : Analysis of An Argument
34. The following appeared as part of a plan proposed by an executive of the Easy Credit Company to the president.
The Easy Credit Company would gain an advantage over competing credit card services if we were to donate a portion of the proceeds from the use of our cards to a well-known environmental organization in exchange for the use of its symbol or logo on our card. Since a recent poll shows that a large percentage of the public is concerned about environmental issues, this policy would attract new customers, increase use among existing customers and enable us to charge interest rates that are higher than the lowest ones available.
Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underline the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound and what, if anything, would help you better evaluate in conclusion.
In this argument the author concludes that the Easy Credit Company would gain several advantages over its competitors by donating a portion of its profits to a well-known environmental organization in exchange for the use of the organization's logo on their credit card.
The author reaches this conclusion on the basis of a recent poll that shows widespread public concern about environmental issues.
Among the advantages of this policy, the author foresees an increase in credit card use by existing customers, the ability to charge higher interest rates and the ability to attract new customers.
While the author's argument has some merit, it suffers from two critical problems.
To begin with, the author assumes that the environmental organization whose logo is sought is concerned with the same environmental issues about which the poll shows widespread concern. However, the author provides no evidence that this is the case. It is possible that very few credit-card users are concerned about the issues that are the organization's areas of concern. If so, then it is unlikely that the organization's logo would attract much business for the Easy Credit Company.
Next, the author assumes that the public's concern about environmental issues will result in its taking steps to do something about the problem - in this case, to use the Easy Credit Company credit card even when it charges higher interest rates than its competitors. This assumption is unsupported and runs contrary to experience.
Also, it is more reasonable to assume that people who are concerned about a particular cause will choose a more direct means of expressing their concern than pay higher rates of interest to a credit card company just because it uses a logo representing that cause.
In conclusion, the author's argument is unconvincing as it stands. To strengthen the argument, the author must show a positive link between the environmental issues about which the public has expressed concern and the issues with which this particular environmental organization is concerned. In addition, the author must provide evidence to support the assumption that concern about a problem will cause people to sacrifice their own personal financial interests.