Ch 26 - Chapter 26

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Ch 26 - Chapter 26 Powered By Docstoc
					Chapter 26   How to Get and Keep Credit

Getting Credit
        Average college student
               o ?
               o ?

Picking a Credit Card
        Main consideration in choosing a credit card?
              o What other features come under consideration?

       Applying for Credit
           o How?

             o Questions asked?

             o What is a security agreement?

       The 5 C’s
           o Capacity
                   Explain

                       They do this by checking what?

             o Character
                   Explain

             o Credit History
                   Credit Bureau – define

                       Report tells you what?

             o Capital
                   Define

                       Includes ….

                       Why is it important for creditors to know you have enough

             o Collateral
                   Like capital how?

                       Unlike capital? If you fail to pay what happens to collateral?
        Your Credit Limit
            o Define

              o What happens to your credit limit when you pay your bills on time?

        Cosigners
            o Define

              o Why you would need one?

              o Who would do it?

Using Credit
        Which costs less, loans from credit cards or banks?

        Installment Loans
             o Define down payment

              o Define principal

              o Use examples dollar amounts at end of definition to further explain

        Cash Loans
            o From 5 sources, what are they?

        Secured and Unsecured Loans
            o Define Secured Loan

              o Define Unsecured Loan

Paying for Credit
        Annual Percentage Rate
              o Define

              o Amount of interest rate depends on what three things?

        Finance Charges
            o Define and state what it includes

              o Used Car example top of p. 425, explain
       Changes in Interest Rates
           o Define variable Rate

             o Fixed rate does what?

           o Why should you beware of introductory rates?
       Fees
           o Why do you have to pay an application fee?

             o What is an annual fee?

             o Define Cash advance

       Grace Period
           o Define

Keeping Credit
       Your Credit Burden
              o Explain and use example

       Making the Minimum Payment
          o Explain and use example

       Overextending your Credit
           o Explain why this is bad

       Credit Problems
           o What are the warning signs of this?

             o Define garnishment of wages

             o Define repossess