Economics -Credit

• Economie
• Secondary Education

Answer in the chat box

Is it safe to buy things on credit? Comment.

Chapter 2.1

Types of Credit

 Pages 582-585

Objectives

Outline the three criteria for qualifying for credit

Learn how to use credit cards responsibly

Discuss what a credit report is and how it is used

Information

​If you budget wisely and save your money, you will be able to buy what you need most of the time. 

Credit is the practice of buying goods or services now and paying for them in the future. One form of credit is a loan, which is borrowed money that must be repaid with interest. Just as banks pay you interest for the use of your money in a savings account, you have to pay them interest if you want to use ​their money to buy something.

What are the different criteria for qualifying for credit ?

Imagine that you have a credit institution that gives credit to the businesses. What are the criteria you would include for providing credit? Mention those other than given before.

What are like short-term loans, because they allow
you to buy things without having the cash at the time
of purchase?

1. Loan
2. Finance charge
3. Annual percentage Rate
4. Credit Card

What are the criteria for credit?

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What are the different kinds of fees or charges which are associated with a credit card?

The cost of credit is called the finance charge. It includes the total amount of interest you will pay plus any service charges. The amount of interest you pay depends on the annual percentage rate (APR), the length of the loan, and how often you make payments.

Analyze the use of the APR method of finance charge in the table given.

What is the amount of interest you pay depends on the ________________,length of the loan, and how often you make payments?

1. Finance charge
2. Cost of borrowing
3. Monthly payment
4. Annual percentage Rate

What is the meaning of a credit report?

How is a credit report used by financial institutions? Name the credit reporting agency in Bahrain and its functions.

Why do we need credit reporting agencies?

Ask questions to each other.