Financial Services _Çô Client Services RFC121 Lecture Notes - Lecture 5: Contingency Plan
5 Jun 2018
School
Department
Professor
Chapter 5
Introduction to Consumer Credit
Learning Objectives - Chapter 5
Define consumer credit and analyze its advantages and disadvantages.
Differentiate among various types of credit.
Assess your credit capacity and build your credit rating.
Describe the information creditors look for when you apply for credit.
Identify the steps you can take to avoid and correct credit mistakes.
Learning Objective # 1
Define consumer credit and analyze its advantages and disadvantages.
What is Consumer Credit?
▪ Credit is an arrangement to receive cash, goods or services now, and pay
for them in the future.
▪ Consumer credit is the use of credit for personal needs, except a home
mortgage.
▪ There are three ways consumers can finance current purchases.
▪ Take money from savings.
▪ Use present earnings.
▪ Borrow against expected future income.
▪ Trade-offs are involved in using credit.
Credit Considerations
▪ Before you use credit for a major purchase, ask yourself some questions.
▪ Could I pay cash or make a down payment?
▪ Do I want to use savings for this purchase?
▪ Does purchase fit with my goals and budget?
▪ Could I use the credit I need for this purchase in some better way?
▪ Can I postpone this purchase?
▪ What are the opportunity costs of postponing this purchase?
find more resources at oneclass.com
find more resources at oneclass.com
