FIN-1100 Chapter Notes - Chapter 6: Personal Bankruptcy, Revolving Credit, Credit Bureau
2 Jun 2017
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L01- describe the reasons for using consumer credit and. People use credit as a way to pay for relatively expensive items and, occasionally, to deal with a financial emergency. Consumer credit is also used simply because it"s so convenient. Finally, it"s used to partially finance the purchase of various types of investments. Unfortunately, consumer credit can be misused to the point where people live beyond their means by purchasing goods and services they simply can"t afford. Such overspending can get so bad that it eventually leads to bankruptcy. Paying off credit card balances at the minimum monthly amount required by the card issuer will take a long time and cost you a great deal of interest, as this table demonstrates. The calculations here are based on a minimum 3% payment and 15% annual interest rate. L02- develop a plan to establish a strong credit history. Establishing a strong credit history is an important part of personal financial planning.
