LECTURE 11.15 CREDIT

LECTURE 11.15 CREDIT - Lecture 16: Consumer Credit Credit...

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Lecture 16: Consumer Credit Credit – an arrangement to receive cash, goods and services in the present in return for payment in the future o Consumer credit is a privilege not a right If you know how to use it, it can improve your life. If you do not know how to use it, then it can destroy your life Consumer credit is non-business debt used by consumers for purposes other than home mortgages i.e. BORROWING FOR NON-INVESTMENT PURPOSES Primary objective of consumer credit o Enjoyment we receive from consumption o Not the increase income we get from wise investments Per capita debt – debt per person o Biggest family financial problem is too much debt or over indebtedness Types of consumer credit o Installment credit – paying a set amount every month until you pay off debt o Non-installment credit Single-payment loans – whole thing is paid at one time Open-ended credit or revolving credit - a consumer credit line that can be used up to a certain limit or paid down at any time
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This note was uploaded on 02/23/2012 for the course ECON 162 taught by Professor Mammen during the Fall '12 term at UMass (Amherst).

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LECTURE 11.15 CREDIT - Lecture 16: Consumer Credit Credit...

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