5.4 Credit and Debt

What is Credit? ...

Creditor is ...

Debtor is ...

Another name for the lender is ________________ .

The person that receives the credit promises to ______________ the money back within a given _____________ period plus _____________ .

Is Credit good or bad?

Good

1

2

3

Bad:

1

2

3

Consumer Credit

How is "consumer credit" different from "credit"? ...

Advantages of Consumer Credit:

1.

2.

3.

Disadvantages of Consumer Credit:

1.

2.

3.

Types of Credit: Credit Card and Loans

Credit Cards

Name the three major Credit Card Companies

1.

2.

3.

Other types of Credit Cards -- name two of each type

1. Travel & Entertainment Cards

2. Retailer Credit Cards

Does it cost a business to accept credit cards as a form of payment? If so, how much?

Why do business accept credit cards as payment?

1

2

3

Some pit falls that of all credit cards:

Explain each and state why it may (will) cause problems

• • Minimum payments on credit cards

  • Using credit cards to pay other credit cards

  • cash advances on credit cards

  • introductory interest rates

Loans

Banks

Installment Sales Credit

Lease

Rent to Own

Pay day services -- pay cheque cash advance services

The Cost of Credit

Define each of these terms

Principal:

Term:

Interest Rate:

Interest:

Security or Collateral:

Risk & Credit Rating:

Credit Worthiness

Credit Rating

What can you to start to build a (good) Credit History:

1

2

3

4

The Three C's of Credit are simply: Character, Capacity, and Collateral 

all considered together with a heavy dose of common sense.

Explain each of the 3C's

Character:

Capacity: 

Collateral

Credit Crisis: 

How do you know that you are in a credit crisis

1

2

3

4

Getting out of Debt

The steps towards getting out of debt include

1

2

3

4