INTRO TO CREDIT

 Obtaining goods or services before payment, based on the

What is Credit?
trust that payment will be made in the future

 Convenient (no cash)

Advantages  Able to buy needed items now

 Creates a record of purchases

 Interest (higher cost of items)

Disadvantages  Overspending becomes easy

 Financial difficulties may arise

Borrowing Money
 Don’t run up more debt than you can comfortably afford

 Don’t exceed the credit limit established by your creditor

Responsibilities of Borrowing Money  Don’t re-sell the merchandise before completely paying the
creditor
 Notify the creditor immediately if your credit card is lost or
stolen

Independent Practice

Instructions: Answer the following questions IN COMPLETE SENTENCES. Once you are finished, save these notes and turn
them in.

Credit

1. Why do you think it is important to establish credit at some point in your life?

When used properly, credit can help you maintain financial flexibility and build your credit.

2. In your opinion, when is it appropriate to use credit? To use cash?

Credit can be used when you want to earn rewards for assets, for example, a house. Cash can be used to get out
of a hurry, for example, a gum or candy.

3. How is using credit related to the financial goals you set for yourself?

I want to regard good credit so my bank can help me in a future to buy a house for me
 INTRO TO CREDIT
Borrowing Money

1. What do you think would be the consequence of running up more debt than you can afford?

You can get in troubles with the law

2. In your opinion, why is it important to be responsible with your credit?

Because it will bring a lot of bad consequences in a future

3. In your opinion, which responsibility of borrowing money would have the worst outcome if disobeyed? Why?

The law can put you in jail for not paying what you owe since you are practically stealing from the people who are
lending you money