1. Buy Now Pay Later…

2.  How to analyze the advantages & disadvantages of consumer credit  How to distinguish among various types of consumer credit  How to determine what creditors look for while lending money  How to maintain a good credit score

3.  Bank lends you money (principle) in exchange for your promise to pay it back with interest.  Interest - $ you pay to use credit  APR - annual percentage rate: amount it costs you a year to use credit (in % rate)  It includes interest, fees and service charges.

4.  Annual fee - yearly charge for the privilege of using credit. YUK!  Finance charge: dollar amount of using credit  Origination fee: charge for setting up a loan (mortgage)

5.  Access to cash in case of emergency  Ability to buy now  Safety and convenience  Bonus points or cash back  Safer than a debit card for on line purchases  You need good credit to make purchases

6.  Credit costs money $$$$$ APR  Temptation to overspend  May lose your good credit reputation if you do not repay on time  Too much credit can lower your FICO score

7.  Buy now pay later –  Open Ended Credit – you are given a certain limit (line of credit)  Grace period: number of days which no interest or finance charge will apply. Pay quickly!  Minimum Payment - 2% of your credit purchases - pay more than the minimum!

8.  Installment Loans: Closed Ended Credit  Payments on a regular basis  Auto Loans Mortgages : Closed Ended Credit 15 - 30 yrs home loan interest rates are lower than installment & credit card rates

9.  Credit history - record of your financial transactions  Payments, credit lines, income  FICO scores: 500-850  Everything is linked to your social security #  Three major credit reporting agencies:  Exquifax, Experian and Trans Union  Allowed 1 free credit report per year - GET IT!

10.  Unable to pay debt, you may file:  Chapter 7 – erase debt & you may have to go through some credit counseling  Chapter 13 - you may pay back some of your debt with more time. Reorganize  Can only file once every 7 years  Bad credit for up to 10 years!  More than 1.5 people filed last year

11.  Capacity – money coming in  Character - history  Capital - assets  Collateral – cash  Credit History - score  These all affect your FICO score