CDAE 158 Lecture Notes - Lecture 9: Major Force, Embedded System, OverdraftPremium
3 pages76 viewsFall 2018
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Introduction to Consumer credit
3 ways consumers can finance purchases
- Draw on savings
- Use present earnings
- Borrow against expected future income
Trade-offs with each alternative
- Depleting savings reduces emergency funds
- Spending current income on luxuries will eventually reduce future well-being
- Spending future income now reduces funds available for future expenses
Uses and misuses of credit. Before major purchase, ask:
- Do i have the cash for the down payment?
- Does the purchase fit my budget
- Can I postpone this purchase?
- Could I use the credit i need in some better way?
- Do I want to use my savings for this purchase?
Consumer credit importance
- A major force in American economy
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