Finance Unit Three: Credit

Close-End Credit

• A loan that must be repaid with finance charges on a certain date. Given for a purpose.

• A loan that requires collateral on the property you take a loan out for.

• Includes a house, car, jewelry.

• Include car loans, student loans, and most home loans

Secured Loan

• Requires collateral.

• MUST be paid on a certain date.

• Made on the strength of your signature alone

• Allows user to use a certain amount of money for an indefinite period.

What are the three ¨C ¨ in credit.

• Capacity---Capital---Consumerism

• Character---Consumerism---Capital

• Character---Capacity---Capital

• Character---Capital---Confidence

Which of the following is not true about credit reports?

• The information on a credit report will be the same regardless of the agency that provided it.

• A credit report shows how your financial responsibility

• FCRA requires a copy to you once every 12 months of your credit report

• A credit report should be carefully reviews on a basis.

What are the three credit agencies.

• Equifax, Transunion, Experian

• Equifax, Credit Union, Transcredit

• Experian, Equifax, Credit America

• Experience, Transunion, Equia Union

Which of the following is an easy-access credit trap?

• A finance charge

• A payday loan

• Compound interest

• Store credit cards

How long does it take to get rid of bad credit.

What should a person do if he or she has trouble paying bills.

• Call Bankruptcy

• Call and seek advice from family members

• Seek help from a Credit Counseling Service.

• take out a loan for help

Whats a grace period?

• The time between the billing date and the start of interest charges.

• A break before you must pay your credit

• The time after your credit is not paid and interest adds up.

• THe time between the start of interest charge and the billing date.

Three alternatives to using credit

• not to buy credit

• to pay with savings

• to postpone buying now, and buy later with cash

• to you a debt card or other paying options