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Published byTamsyn Arnold Modified over 9 years ago
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Types of Credit
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Closed End or Installment Credit Loans, merchandise and services are paid for this way. Fixed amount of $$, fixed payments, interest, fixed period of time. Orthodontia, medical services Furniture, appliances, electronics Loans: autos, houses, school, personal, etc.
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Secured vs. Unsecured Loans Secured (collateral such as auto, house, etc.) Unsecured (no collateral)
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Revolving Credit Many items can be bought using this plan as long as you don’t go over your limit and you make regular payments. May be able to carry a balance, however, interest will be charged.
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Charge card (30 day account) The entire account balance must be paid in full when billed. i.e. American Express
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Credit Card Retail cards (Target, Nordstrom, REI, GAP, etc.) Travel/Entertainment (gas, Diner’s Club) Bank Credit Card General Purpose cards accepted multiple places and issued through a financial institution (VISA, MasterCard).
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Affinity Cards A financial institution plus non-financial group join together to offer a card. Schools, sporting teams, airlines, non-profits,
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Co-Branded Cards Financial institution plus a retail company.
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Stored Value Cards A type of electronic bank debit card. Stored-value cards have a specific dollar value programmed into them. Banks provide these cards as a service for customers who cannot open checking or other deposit accounts.
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In total, American consumers owe: $11.62 trillion in debt An increase of 3.4% from last year $880.3 billion in credit card debt $8.05 trillion in mortgages $1,122.7 billion in student loans An increase of 10.5% from last year
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Credit Card Debt Credit card debt is the third largest source of household indebtedness. Only the mortgage and student loan debt markets are larger. 46.7 % of households had a credit card balance on December 30, 2012
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Is lower credit card debt good for the economy? Credit card debt is currently holding fairly steady – but whether or not that’s a good thing is up for debate. Turn to your partner and discuss – what are the pros and cons of this?
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