Credit/Budgeting

Credit means

• Buy now, pay later

• Comes out of your account a day later

• Never having to pay back

• A grant from a financial institution

In the following scenario who is the creditor? Emma went to Best Buy to get a new laptop and printer. The combo she wanted as $2000. Emma decided to apply for the Best Buy store credit card. Her credit was good and she was approved. Who is the creditor?

• Emma

• Best Buy

• The laptop maker

• Emma's bank

All of the following are advantages of credit except

• Allows the use of goods/services as you pay for them

• You never have to pay what you borrowed back

• You can buy expensive items without having cash on hand in that exact moment

• Source of cash for emergencies

All of the following are disadvantages of credit except

• Reduces future income

• It's expensive due to interest charges

• It's convenient when you don't have cash to use

• Encourages impulse buying

Credit cards can be used _________

• Anywhere

• Nowhere

• Only in the US

• Only in China

Installment loans are used for large purchases such as _______ and _________

• Car or dishwasher at Car Max or Best Buy

• House or apartment

• A hat and 1 pair of shoes at Goodwill

• MCDonalds or Chick-Fil-A

Student loans are used to _________

• Finance your home

• Finance your education

• Finance your hospital expenses

• Finance your high school education in a public school

Mortgages are used to

• Finance your car

• Finance your education

• Finance your home

• Finance medical bills

Collateral is __________

• Something of value held by a creditor in case you can't pay your loan

• A movie starring Tom Cruise

• Something the bank gives you when you take out a loan with them

• A document you sign if you purchase a vehicle with cash instead of credit

An example of someone who can be YOUR co-signer is

• your teacher

• your pastor

• your legal guardian

• your employer