COMMERCE 4FP3 Lecture Notes - Lecture 5: Credit Bureau, Phishing, Credit History
15 Jul 2018
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Credit: is money granted by a creditor or a lender to borrow for a future repayment. Obtaining and using credit wisely is key. Credit allows individuals to make large purchases (ex. Home, car, education) when they do not have sufficient cash immediately available. Credit can have a high cost and borrowing too much can cause future problems. With credit, the borrowing is renting the money for a fee. A loan is provided for a specific purchase with interest charged on the amount borrowed. Blended payments: repaying on a regular basis, encompasses a portion towards interest and a portion towards principle. Revolving credit: credit provided up to a specified amount, based on income, debt level, and credit history. Interest is charged each month, only on the outstanding balance. Can pay off at any time, usually a minimum payment required each month.
