Lesson_7 - Required Readings and Viewing Materials for...

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Required Readings and Viewing Materials for Lesson 7: Keown, A. (2010). Using credit cards: The role of open credit. In Olver, J.M., Lant, T.K., Plant, R., Higgins, C.A., Majeske, K.D., & Kursh, S.R. (Eds.), Personal Finance: Turning Money into Wealth . Upper Saddle River, NJ: Prentice Hall Business Publishing. Read pages 3, 8-13. Savvy N (Host) nd ) Borrowing using plastic: Types of credit cards purpose where to obtain and benefits Savvy, N. (Host). (n.d.). Borrowing using plastic: Types of credit cards, purpose, where to obtain, and benefits. FDIC Money Smart. Podcast retrieved from http://www.fdicmspodcast.com/listen_credit.html# Listen to entire audio clip, or read audio clip transcript. Optional Readings and Viewing Materials for Lesson 7: Bankrate, Inc. (2011). Credit Card Guide. Retrieved from http://www.creditcardguide.com/ Explore website. Savvy, N. (Host). (n.d.). When you need to borrow: Borrowing basics part I. FDIC Money Smart. Podcast retrieved from http://www.fdicmspodcast.com/listen_credit.html# Listen to entire audio clip, or read audio clip transcript. 1 Savvy, N. (Host). (n.d.). When you need to borrow: Borrowing basics part II. FDIC Money Smart. Podcast retrieved from http://www.fdicmspodcast.com/listen_credit.html# Listen to entire audio clip, or read audio clip transcript.
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By the end of this lesson, you should: • Understand the concept of credit. • Know the different types of credit: • Consumer • Open-end/revolving and closed-end • Installment • Secured and unsecured • Be familiar with the different types of credit cards, how they work, and how they are used. • Identify the 3 credit card philosophies and each of their criteria. • Know the questions you should ask when contemplating your readiness for a credit card. 2
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Let’s start out by reviewing: What is credit? Do any of you know? Credit is an arrangement to receive cash, goods, or services now and pay for them in the future. It is based on trust in your ability and willingness to pay bills when due. Credit is referred to as a tool used by a person to pay for something. 3
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Consumer credit is debt used by consumers for expenditures other than home mortgages. Open-end credit refers to a line of consumer credit extended before you make a purchase. Credit is extended in advance of any transaction, so that the borrower does not need to reapply each time credit is desired. You can repay at whatever pace you like as long as you pay the minimum balance each month. Credit cards are an example of open-end credit. Non-installment credit includes open-end credit. Open-end credit is also referred to as open credit and/or revolving credit. Closed-end credit is used for a specific purpose and amount. Loans are repaid in a designated amount of time with equal monthly payments. An example might be a car loan or a loan for a computer. Another name for installment credit is closed-end credit or closed credit.
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Lesson_7 - Required Readings and Viewing Materials for...

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