in15 - Chapter 6: Credit Use and Credit Cards Objectives...

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Unformatted text preview: Chapter 6: Credit Use and Credit Cards Objectives Compare and contrast installment and non-installment credit and discuss the costs of credit. Discuss reasons for and against using credit. Describe the types of charge accounts. Objectives Describe the process of opening a credit account and the procedures lenders use to evaluate credit applicants. Manage your credit card and charge accounts properly. What is Consumer Credit? Receiving products, services or cash now, and paying for them in the future. Before you use credit, think about... Could I pay cash or make a down payment? Do I want to use savings for this purchase? Does purchase fit with my goals and budget? 6-2 What is Consumer Credit? Does purchase fit with my goals and budget? Could I use the credit Ill need another way? Can I wait to buy it? What are the opportunity costs of postponing the purchase? What are the economic & psychological costs of using credit for the purchase? 6-3 (continued) Credit Use and Credit Cards 1:3 fear credit over-extension 1:2 are concerned about payments A RECENT SURVEY OF U.S. HOUSEHOLDS: Credit Use and Credit Cards Credit is any situation in which goods, services or money are received in exchange for a promise to pay a definite sum of money at a future date. Credit Use and Credit Cards Consumer Installment Non-installment Open-ended Closed vs. Open-End Credit Advantages of Credit Current use of goods and services Demonstrates financial stability Use for financial emergencies Convenience when shopping Safer than cash Convenience Emergencies Identification Reservations Reasons For Using Credit...
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This note was uploaded on 02/11/2011 for the course FIN 3403 taught by Professor Tapley during the Spring '06 term at University of Florida.

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in15 - Chapter 6: Credit Use and Credit Cards Objectives...

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