1. Chapter 5 In-Class Notes

2. Background on Credit Types of credit: instalment and revolving open-end credit There are advantages and disadvantages to using credit Credit history: your history with credit instruments such as credit cards and lines of credit Credit insurance: a commitment to cover credit payments 5-2Copyright © 2009 Pearson Education Canada

3. Credit Bureaus Create credit reports Create credit scores, or BEACON scores, which record: Your credit payment history (35%) The amount of credit you use (30%) The length of time you have had established credit (15%) The types of credit you have established (10%) The number of credit inquiries you make (10%) 5-3Copyright © 2009 Pearson Education Canada

4. Credit Cards Owning a credit card involves: An application process A credit limit Fees and incentives Cash advances and financing, in some instances Keeping track of credit card statements 5-4Copyright © 2009 Pearson Education Canada

5. Tips on Using Credit Cards Use a credit card only if you can cover the bill Impose a tight credit limit Pay your credit debts as promptly as possible Reduce your credit spending if necessary Avoid credit repair services File for bankruptcy if you become insolvent 5-5Copyright © 2009 Pearson Education Canada

6. Identity Theft and Identity Theft Tactics Identity theft: occurs when an individual uses personal, identifying information unique to you (e.g., your Social Insurance Number) without your permission for their personal gain People can steal your identity by: Shoulder surfing, dumpster diving, and skimming Pretexting, phishing, and pharming Abusing legitimate access to records Participating in crime rings and mail theft 5-6Copyright © 2009 Pearson Education Canada

7. Protecting Against Identity Theft and Response to Identity Theft Know the party to whom you are giving personal information Carry a minimum amount of ID Keep personal information in a safe place Report identity theft to the police Cancel items such as your bank accounts, credit cards, and driver’s licence Advise your utility companies and financial institutions of the theft 5-7Copyright © 2009 Pearson Education Canada