Lesson_2 - Understanding Credit and its Use FSoS 1301: Cash...

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1 Understanding Credit and its Use FSoS 1301: Cash or Credit: You Need to Know Lesson 2 Required Readings for Lesson 2: No required readings for Lesson 2.
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2 Learning Objectives Be familiar with why people use credit. Understand how marketing and the social environment impact credit usage. Know how behaviors and habits impact spending. Be able to discuss what credit is and why all credit is not alike. Lesson 2 By the end of this lesson, you should: • Be familiar with why people use credit. • Understand how marketing and the social environment impact credit usage. • Know how behaviors and habits impact spending. • Be able to discuss what credit is, and why all credit is not alike.
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3 Understand Credit Basics What is Credit? What is a Credit Card? Borrowing money or purchasing an item with the promise to repay at a future date. A plastic card providing access to a line of credit. The card can be used to make purchases with the promise to repay. One does not have to pay the full amount each month, but rather, the minimum payment. The balance carried over from month-to-month accrues interest. What is Credit? Borrowing money or purchasing a good with the promise to repay at a future date. What is a Credit Card? A plastic card providing access to a line of credit. The card can be used to make purchases with the promise to repay. One does not have to pay the full amount each month, but rather, the minimum payment. The balance carried over from month-to- month accrues interest.
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4 Reasons Why People Use Credit Lesson 2 Safety And Security Convenience Big Ticket Items Investments Marketing Lack of Information Social Environment Spending Behavior Why do people use credit cards? These are some of the main reasons people use credit. Let’s look at each of these in more detail!
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5 Safety and Security Travel – Eases obtainment of hotel and car rental services – Minimizes risk of losing cash Emergency situations – Aids in acquirement of services Lesson 2 Travel: Credit cards come in handy while traveling. Many hotels and rental car services require a deposit to secure a hotel room or car rental service. This can be hard to do without a major credit card. People often use credit cards when traveling to avoid carrying large amounts of cash. If you lose cash, it is gone. Traveler’s checks are an option, but a small fee is often charged for their use. If you lose your credit card, by law, a credit card company can only charge you up to $50.00 for unauthorized use. This requires that you contact the credit card company as soon as you notice your card is gone. As a result, many individuals regard credit cards as a less “worrisome” way to travel. The trick is to budget your spending before you travel and to make sure you have enough money to pay the bill in-full when you return home. Emergency Situations:
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Lesson_2 - Understanding Credit and its Use FSoS 1301: Cash...

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