MCS 2100 Lecture Notes - Lecture 4: Annual Percentage Rate, Effective Interest Rate, Revolving Credit

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 2100
• Professor: May Aung

Document Summary

Chapter 6 choosing the source of credit: the cost of credit alternatives. Credit an arrangement the receive cash goods or services now and pay for them in the future. Consumer credit the use of credit for personal needs (except a home mortgage) Consumer loans: onetime loans that borrow replays in a specified period of time with a predetermined payment schedule, examples: Revolving credit: a line of credit in which loans are made on continuous basis and borrower is billed periodically for a least partial payment, examples: Credit card issued by banks of stores. Charge cards of travel and entertainment cards. Line of credit and overdraft protection: you can use revolving credit purchases if you wish not to exceed your credit limit: A pre arranged loan from a bank for a maximum specified amount. Costs associated with credit cards: late or overdue payments, exceeding the credit limit.