Chapter 8 a - Credit history Capital Collateral • Credit...

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Chapter 8: Managing Your Credit Chapter Objectives Provide a background on credit Explain the key characteristics of credit cards Offer tips on using credit cards Credit Cards Advantages No need to carry large amounts of cash Free financing as long as you pay in full each month Monthly statement for recordkeeping Disadvantages Can make purchases that you can’t afford Allows spending beyond your means Excessive spending can continue with minimum payments Credit Cards (cont’d) Applying for a credit card—potential creditors obtain information from you, about you, and about the economy Personal information Cash inflows Cash outflows
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Unformatted text preview: Credit history Capital Collateral • Credit Cards (cont’d) Other information that creditors evaluate Income Existing debt level Current economic conditions • Types of credit cards Visa, MasterCard and American Express most popular Visa and MasterCard allow partial payments American Express requires full payments • Financial Planning Online: Your Credit Card Report • Go to: http://finance.yahoo.com/banking-budgeting/credit-reports • This Web site provides a credit report that assesses your creditworthiness. The report is available to you online for a small fee...
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