Credit Review

What is credit?

• A legal agreement to receive cash, goods, or services now and pay for them in the future.

• A method of payment where cash is used to make purchases.

• A type of loan that can only be obtained from a bank.

• A financial difficulty that arises when one loses track of how much has been spent.

Where can you obtain credit?

• Bank

• Credit Union

• Finance Companies

• All of the above

What are the advantages of credit?

• Able to buy needed items now

• Don't have to carry cash

• Creates a record of purchases

• All of the above

What are the disadvantages of credit?

• Interest (higher cost of items)

• May require additional fees

• Financial difficulties may arise if one loses track of how much has been spent each month

• All of the above

What are the three C's of getting credit?

• Character, Capital, Capacity

• Credit, Cash, Collateral

• Cost, Convenience, Credit Score

• Credit Card, Checking Account, Car Loan

What are your responsibilities when using credit?

• Borrow only what you can repay

• Read and understand the credit contract

• Pay debts promptly

• All of the above

What are your rights with credit?

• Truth in Lending Act

• Fair Credit Reporting Act

• Equal Opportunity Act

• All of the above

How can you build a credit history?

• Pay all bills promptly

• Open a checking account and don't bounce checks

• Apply for a local store credit card and make regular monthly payments

• All of the above

What are the types of credit?

• Single-payment credit, Installment credit, Revolving credit

• Bank credit, Retail credit, Online credit

• Good credit, Bad credit, No credit

• Credit card, Debit card, Prepaid card

Why does credit matter?

• To establish financial responsibility

• To get loans for larger items at lower interest rates

• To demonstrate financial responsibility when renting an apartment

• All of the above