CREDIT

1
CREDIT

• GOOD OR BAD! ?
• THAT IS THE QUESTION!

2
CREDIT

• What is credit?
• supplying of money, goods, or services tat
  present in exchange for the promise of future
  payment
• Why do we have credit?
• we dont always have the cash, check, or
  savings?

3
CREDIT

• Who has a credit card?
• How did you get it?
• What is your credit limit?
• Good / Bad
• Do you think that school / cafeteria should
  accept credit?

4
CREDIT

• Why would a business want to accept credit cards?
• Increase sales, customer service, get cash now
  for payment
• Do they accept all cards?
• MasterCard, Visa, Amex, Discover, etc
• Why do you want businesses to accept credit
  cards?
• Good / Bad

5
TYPES OF CREDIT

• Cash credit and Sales Credit
• loan to receive cash cash credit
• buy something to pay later sales credit ?
• Secured and Unsecured Credit
• Secured
• backed by a pledge of property
• Collateral home, car, anything that you own and
  it has agreed value
• Unsecured
• not backed by property!

6
TYPES OF CREDIT

• Closed End Open - End
• Closed
• One time extension of credit
• Specific Amount time
• Open (line of credit)
• typical credit card
• amount of interest paid is based on the balance

7
CREIDT Pros and Cons

• Pro or Con?
• Temporary expansion of Income
• washer / dryer brakes cash?
• Convenience
• Do you want to carry 1000 in cash?
• Do you want to have to go to the store to buy
  everything?
• Wait 1 month to receive full refund on your
  large purchase?
• Financial Responsibility
• With power comes great responsibility!

8
CREIDT Costs!!!!!!

• Interest and Fees
• the total cost of using credit, including
  interest and any fees is called finance charge.
• Increased Cost of Merchandise
• Retailers / Companies must pay banks to collect
  on their credit sales these costs are included
  in the items you buy!
• Opportunity cost actually reduces purchasing
  power

9
CREIDT DRAWBACKS!!!!!!

• SECURITY CONCERNS
• Make precautions against the card being stolen
  or used with out your permission
• IMPUSE BUYING!!
• buying with out careful consideration
• Overspending
• when you are not spending cash, you have more of
  a chance to spend more than you would have
  allocated on your budget (casino chips)
• Reclaimed Merchandise
• when you dont pay, they come back for the
  goods!!! (repo man)