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12 Cards in this Set

  • Front
  • Back
the privilege of using someone else's money for a period of time
anyone who buys on credit or recieves a loan
The one who sells on credit or makes a loan
3 types of credit
trade, loan, sales
3 C's
Character-honesty and willingness to pay a debt when it is due

Capacity-your ability to pay a debt when it is due

Capital-the value of a borrower's possessions
the creditor believes that the debtor will honor the promise to pay later for goods and services that have been recieved and used
Credit References
businesses or individuals from whom you have recieved credit in the past and/or who can help the business decide whether loan or salescredit should be extended to you
Benefits of Credit
-Immediate possession
-Credit Rating
-Useful in an Emergency
Credit Rating
it is useful during an emergency when you must borrow money or you want to make a major purchase
Precautions for use of credit
-careless buying
-higher prices
-overuse of credit
regular account
the seller or provider expects payment in full within a specified period of time--usually 25 to 30 days after billing date
budget account
requires that payment of a certain fixed amount be made over several months