Credit
Why use credit?
Credit can allow you to buy things that might not be attainable otherwise.
What institutions provide credit?
Banks, credit unions, payday lenders, credit card companies
What is an unsecured loan?
A loan that is not backed up by collateral, in other words, you are not risking something valuable you have being taken away to pay back the loan.
What are some advantages of using credit?
You gain access to greater resources than you might have otherwise
What is interest? (In the context of lending money.)
The additional amount of money that is added onto what you already owe as the incentive to the lender.
What is collateral?
Something valuable that you have that can be used as a guarantee of a loan. If you don't pay, then you lose the collateral to the lender.
What are the disadvantages of using credit?
Just because you are not paying immediately, does not mean you are keeping your money. Instead you are paying it off, and more besides! Used carelessly, this can utterly ruin you. If you cannot pay, then you might get repossessed.
Who most often wins in a credit transaction?
How does risk influence the rate of interest?
The more risk, the more interest.