Management and Organizational Studies 2277A/B Chapter Notes - Chapter 6: Cash Flow Statement, Unsecured Debt, Making Money

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2277A/B
• Professor: Barry Hawn

Document Summary

Credit: funds provided by a creditor to a borrower that the borrower will repay with interest or fees in the future. A loan for speci c purchases with interest charged on the amount borrowed. It is repaid on a regular basis, generally with blended payments. Ballon payment: the payment made at the day of maturity. Credit provided up to a speci c maximum amount based on income, debt level, and credit history; interest charged each month on the outstanding balance. Minimum payment usually around 3% of the outstanding balance. Access to credit allows you to achieve some of your goals, such as purchasing a home or car sooner than you would be able to otherwise. Appropriate uses of credit also helps you build a credit history. Also allows you to make purchases where cash isn"t an option (internet purchases) You could have dif culty paying back debts if you don"t budget correctly. Can lead to impulse purchases you cant afford.