Credit Overview by fanzhongqing


									Credit Overview
NEFE Program Workbook
Unit 4: Day 1

Define Credit
What is credit?
How does Credit relate to the Principal and Interest?

List 4 types of credit and a feature of each.

The Cost of Using Credit
What is the relationship between interest rates and the cost of using credit?
What is the biggest cost of using credit?
How are interest rates quoted?
What does this rate it tell you?

Other costs associated with credit cards. What are “teaser rates”?

Define the following:
Annual Fee

Credit limit

Finance Charge

Origination Fee

Define Grace Period. What advice is given about the grace period

Loan Term: What is it and how does it relate to the cost of using credit?

Name two other fees associated with not paying on time that you can ask about when
purchasing credit.

How do you think credit work against you in regards to compounding interest?
Credit Benefits
What are four benefits of credit to you? Explain each briefly
What are four Bad aspects of credit? Explain each briefly

Sources of Credit
List 3 places you can apply for credit.

Assignment 5.1 Shopping for the best credit cards.
List the 6 questions to ask when you compare credit.

Gather information on 4 credit cards. Find out as much information as you can. All
cards must disclose the basic costs. You don’t need to apply to find these out at the card
site. Google is a good place to start

Card         APR           Annual         Grace      Minimum      Credit        Other
Name                       Fee            Period     Payment      Limit         Fees/Notes

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