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10 Credit - Prentice-Hall Inc Today Chapter 6 Using Credit...

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Prentice-Hall, Inc. 1 Today: Chapter 6 Using Credit Cards: The Role of Open Credit Definitions and Examples of Credit z ________________ – receiving cash, goods, or services with an obligation to pay later. z ___________________ – credit that you can must repay in fixed payments { Examples – car loans, mortgages z ____________________ -- credit that you can use and repay at your pace so long as you pay the required minimum monthly payment. { Examples -- Credit cards or department store credit cards Factors That Determine Creditworthiness z Annual income z Length of time at current residence z Length of time at current job z Number of bank accounts z Number of credit cards z Credit history Getting a Credit Card: The Five Cs of Credit z Character z Capacity z Capital z Collateral z Conditions ____________ : sense of responsibility toward debt repayment z Proven debt repayment history z Job stability z Home ownership/rental length z Low debt load
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