Past Exam Questions Flashcards
State one advantage of using credit to pay household utility bills
Enables consumers to pay large bills and purchase expensive items such as a car which most people would not be able to pay for with cash
State one disadvantage of using credit to pay household utility bills
May encourage impulse buying and cause consumers to live beyond their means which can lead to debt, as a planned budget was not followed
State three advantages of credit buying
Enables consumers to pay large bills and purchase expensive items such as a car which most people would not be able to pay for with cash
Useful to meet the cost of unexpected emergencies such as doctors visit
Eliminates the need to carry large sums of cash around which could be lost or stolen
Identify three areas controlled by the Consumer Credit ACT 1995
Stipulates that lenders who provide credit must not visit borrowers in their workplace seeking payment
Ensures credit advertising contains the Annual Percentage Rate (APR) and restrictions on the availability of credit
Imposes that credit agreements e.g. hire purchase must be in writing and contain information including the cash price and the hire-purchase price of the good, the names, addresses and signatures of all parties involved and the number of payment instalments
Name two types of credit available to consumers when buying a car
Hire Purchase
Term Loans
Sate the main advantage of hire purchase
You have the use of the products while you are still paying for it
State the main advantage of term loans
Eliminates the need to carry large sums of cash around which could be easily lost or stolen
List four methods of paying for goods and services
Cash
Cheque
Debit cards
Credit cards
