Managing Credit: Sources and uses. Lesson 1-2

What are two types of consumer credit?

• Close and Open

• Closed-open and Open-closed

• Closed-end and open-end

• Loans and credit

What is Close-end credit?

• One-time loan paid back in a specified time in payments of equal amounts.

• A line credit loan paid back in payments of variable amounts.

• A credit card

• Several-time loan paid back in payments of equal amounts.

What is Open-end credit?

• A line of credit in which loans are made and repaid on a continuous basis.

• One-time loan paid back in a specified time in payments of equal amounts.

• A Loan

• A line of debit in which loans are made and repaid on a continuous basis.

What are the major sources of Inexpensive loans?

• Parents, Family Members, Friends

• Commercial Banks, Savings and Loans, Credit Unions

• Finance Companies, Retail Stores, Credit Cards

What are the major sources of Medium-priced loans?

• Parents, Family Members, Friends

• Commercial Banks, Savings and Loans, Credit Unions

• Finance Companies, Retail Stores, Credit Cards

What are the major sources of Expensive loans?

• Parents, Family Members, Friends

• Commercial Banks, Savings and Loans, Credit Unions

• Finance Companies, Retail Stores, Credit Cards

A good reason to borrow is a medical emergency

• True

• False

Which is an unnecessary reason to borrow?

• Borrowing for everyday living expenses.

• Borrowing for college education.

• Borrowing for invest.

Consumer credit refers to the use of credit for personal needs by individuals and families.

• True

• False

What is the interest?

• A periodic charge for the use of credit.

• A periodic charge for the use of debit.

• A periodic charge for the use of time.