Americans and Credit
pg.88
pg.88
Most common type of debt
What is installment debt?
Installment debt owed on houses, buildings, or land
What is a mortgage?
Many things that Americans buy on credit are _______ items
What are "big-ticket" items?
When you borrow, you know you will have to pay____ on the loan
What is interest?
Many people buy _____ or manufactured items that last longer than three years, on installment plans.
What are durable goods?
This is important in determining the size of the borrower's monthly payments and the total amount of interest he or she must pay.
What is the length of the installment period?
The use credit allows the borrower to enjoy consumption _____ rather than _____.
What is now rather than later?
The benefit of barrowing is something only____ can decide
What is you or the consumer?
Someone else may be a bank, credit union, credit card company, or store.
What is interest?
A mortgage can also be known as a _____
What is debt?
Consumer Installment debt has _____________ over the years.
What is increased?
A benefit of borrowing
What is to enjoy a good or service now rather than later.
Durable goods
What are automobiles, refrigerators ,washers ,and other appliances?
The longer the repayment period is, the greater the final total payment will be
What is installment debt?
Name a reason why people go into debt in terms of credit
- What is because they feel forced to buy the items?
- What is because they believed they are essential?
- What is to spread the payments over the service life of the item being purchased?
Banks are willing to lend funds to people for this reason.
What is because they can charge interest and gain profit?
Consumer installment debt sources.
What is U.S Federal Reserve?
A longer repayment period results in this
What is a smaller monthly payment?
Name one of the 5 questions on the Checklist for Buying on Credit
- Do I really require this item?
- If I pay cash, what will I be giving up that I could buy with these funds?
- if I barrow or use credit, will the satisfaction I get from the item I buy be greater than the interest I must pay?
- Have I done comparison shopping for credit?
- Can I afford to use credit now ?
The cost of borrowing
What is whatever the borrower must pay in interest or lost opportunities to buy other items