1. Consumer Responsibilities and Protections
Ch 11

2. Personal Financial Goals
Everyone is a consumer
Make decisions about time and money
Limited income
Maximize your utility (satisfaction)
Personal Finance- way you plan to save or spend income

3. Personal Financial Goals
Set financial goals
Achieve financial goals
Ask questions- do I need this product? Is it the best deal? Can I afford it? Will it prohibit me from buying something in the future?
Seek expert advice- understand before you buy
Ask other people- is it useful? What to expect of it?
Shop at reputable businesses

4. Make wise consumer Decisions
Budget your income
Budget worksheet
Keep it up to date
Comparison shopping
Rational Consumer Choice- satisfaction greatest per dollar

5. Paying for your Purchases
Will it be Cash or Charge?
Cash
Give up ability to purchasing other things in the future
Credit
Give up less to spend in the future
Interest and fees
Prices of big items go up
Don’t have money when young

6. Sources of consumer credit
Consumer Loans- borrowing money to be repaid in regular installments over time
Car Loans
Student Loans
Home Loans
Longer the period more interest Incurred
Better credit rating better interest rate

7. Sources of consumer credit
Consumer Sales Credit- amount charged to an account that involves variable payments over time
Credit card Fees
Annual fee
Exceed limit fee
Interest on Credit card Debt
Grace period- typically 21 days- must pay full balance
If not paid off in grace period- will get interest added of %
Unsecured loan- no collateral- high interest

8. Receive and use Credit Three C’s of Credit
Character- measure of financial responsibility- determined by credit history
Capacity- Consumer ability to repay a debt on time- income- amount already in debt
Capital- measure of the value of things a consumer owns that could be sold or cash to repay a loan

9. Receive and use Credit Credit-Reporting Agencies Equifax Experian
Trans Union
Credit ratings- measure of persons credit worthiness
History of making payments
Current debt
Credit history
Recent applications for credit
Type of credit used

10. Receive and use Credit
Credit Scores- assigns a score to each consumer indicating whether a person is a good or bad credit risk
Minimum score set for loans and credit cards
Accessing your credit file

11. Avoid Credit Problems
Use Credit wisely- dangerous since it is so easy to use
Establish a positive credit history
Be a regular saver
Ask for a credit card from the bank where you save
Make payments on time and never exceed credit limit
Repair a Damaged Credit Rating
Contact lenders in a bad situation
Avoid using additional credit
Identify most important lenders and pay them first
When situation improves use credit regularly in small amounts
Pay off account balance in full every monthly
At least pay more than the minimum

12. Government efforts to protect consumers
Food and Drug Administration (FDA)- set food and drug standards
Federal Trade Commission (FTC)- businesses market in fair honest way
Consumer Product Safety Commission (CPSC)- protect from dangerous products
Environmental agency (EPA)- standards on toxic emissions

13. Take responsibility for your own protection
Consumer rights and responsibilities
Informed
Directions
Return products
Use Common Sense
Use products safely
Replace bald tires
Cheap items only last so long

14. Dealing with identity theft
Identity Theft- someone fraudulently uses you identity to obtain credit or access to financial accounts
Protect yourself from identity theft
Cover pin number
Memorize SSN- don’t carry card
Shred bank statements or bills or anything with SSN on it
Be suspicious if people ask about financial information

15. Dealing with identity theft
What if your identity is stolen?
Contact all three credit reporting agencies, put fraud alert on file
Close existing accounts at buisnesses where you have credit
Report to law enforcement
Contact FTC
Average victim pays $600 and 40 hours to fix problem