Credit: arrangement for deferred payment for goods and services
• This refers to charges or fees which are applied to
your bill for using the credit card, eg balance
transfer fees, late fees, over limit fees
• A credit card company might issue a finance charge
because that is how they make money or it is the
Credit card companies could charge even the smallest
amount to something that’s bizarre.
Some companies offer 0% and some offer 40%!
It is dangerous to pay the minimum amount each
month because that could make your credit score go
Credit Card Companies
• Credit Card Companies include:
A credit rating estimates the credit worthiness of an
individual, corporation, or even a country. It is an
evaluation made by credit bureaus of a borrower’s
overall credit history
A good credit score is 700 and above
A bad credit score is 650 and below
• Benefits of using credit are:
Convenience- can make it easy for you to buy.
Immediate Possession- Credit allows you to have the item
Savings- Some stores wend notices of special sales to
Credit Rating- you can establish a favorable credit rating.
• Problems concerned with credit are:
overuse of credit
• The formula for calculating the interest is interest=
principal x rate x time
• Is a form on which you provide information needed
by a lender to make a decision about gaining credit.
You often fill one out when you are applying to buy a
house, car, etc.
Truth in Lending Law
Truth in lending law of 1968 was the first of a series of
credit protection laws. Truth in lending requires that
you be told the cost of credit before signing
Fair Credit Billing Act
• The Fair Credit Billing Act (FCBA) is a United States
federal law enacted as an amendment to the Truth
in Lending Act (codified at 15 U.S.C. § 1601 et
seq.). Its purpose is to protect consumers from
unfair billing practices and to provide a mechanism
for addressing billing errors in quot;open endquot; credit
accounts, such as credit card or charge card