CREDIT

							CREDIT


  Good or Bad
What is credit?
 An arrangement between a buyer and
  a seller
 Buyer can take possession of
  something now
 Then buyer can pay for it later or
  over time
Creditors
 Lenders of money
 What are some types of creditors
     Credit Cards
     Banks
     Mortgage Companies
     Car dealerships
Credit Rating
 Number reflecting your ability to
  manage credit
 Factors that influence it
   Pay on time
   Amount of debt
   Type of debt
Credit Cards
 Advantages
     Not have to carry cash
     Have in emergencies
     Have items while paying for them
     Convenience
Credit Cards
 Disadvantage
     Possible identity theft
     Can cost more than paying in cash
     Poor use can limit future spending
     Easy to get into trouble financially
     Can have hidden costs—have to watch
      carefully
Collateral
 Creditor keeps item until loan paid off
 Provides protection for creditor if
  borrower fails to repay loan
 Creditor keeps item if loan not repaid
 Type of collateral
   Title to car
   Deed to your house
   Deed to your land