Understanding Credit and Its System

What is the essence of credit?

• Futurity

• Trust and confidence

• Risk

• Credit standing

What does the word "credit" in Latin?

• Futurus

• Trust

• Creditium

• Creditor

What is a key element of the credit system that minimizes risk?

• Securing the loan

• Lower interest rates

• Immediate repayment

• Trust only in personal factors

Which era introduced a better banking and credit system to promote rural economic development?

• Pre-Spanish time

• Spanish era

• American era

• Under the Republic

What does a functioning credit system require?

• Facilities

• Trust

• Risk management

• Monetary stability

What is one advantage of installment buying?

• Higher cost than cash purchases

• Opportunity to budget better

• Increased temptation to buy unnecessary items

• None of the above

What is a disadvantage of installment purchases?

• Helps build credit

• Immediate access to goods

• Encourages unnecessary buying

• Provides flexible payment options

When deciding between installment buying and cash purchases, what should a buyer consider?

• Which offers larger loans

• The interest rate

• Credit card rewards

• Future costs of goods

What does installment buying often include as an advantage?

• Cost-saving

• Promotions and financing deals

• Immediate ownership with no interest

• Lower risk than cash purchases

Which is a common result of installment buying?

• Lower overall cost

• Temptation to overspend

• Interest-free credit

• Limited payment flexibility