Personal Financial Management - Chapter 5 Flashcards
Buyers remorse
Regretting a purchase soon after making it
Annual percentage rate (APR)
Cost of borrowing money on an annual basis
Brand recognition (2)
Consumer awareness that a particular brand exists
Part of product positioning
Financing (2)
To buy an item with credit; borrowing money
Paying overtime
Finite
Having a beginning and an end
Impulse purchase
To buy an item without thinking about it
Opportunity cost (2)
True cost of something in terms of what you have to give up to get the item
The benefits of what you would have had by taking the other action
Rule of 78 (2)
Pre-payment penalty in a financing contract
The portion of “90 days same-as-cash” agreement that states the entire loan amount plus the first 90 days becomes due immediately
Significant purchase
An amount of $ you spend, usually $300 or more, that causes some pain to part with
Seek wise
Counsel
Wait ____ before making a major purchase
Overnight
The # of advertisements a person views daily?
3,000
Buyer beware
Caveat emptor
Branding
Creates consumer awareness for a trademark or product
Necessities (4)
Utilities
Groceries
Housing
Transportation
How does advertising affect your buying decisions? (3)
Branding
Shelf positioning
Color
5 steps to follow before making a significant purchase (5)
- Wait overnight
- Consider buying motives
- Don’t buy anything you don’t understand
- Consider opportunity cost of $
- Seek wise counsel
Marketing tools (4)
Personal selling
Financing
Tv, radio, Internet, and over social media
Product positioning
Product positioning (4)
Brand recognition
Color
Shelf position
Packaging
what % of “90 days same-as-cash” contracts convert to payments?
88%
“90 days same-as-cash” contracts are usually at what % APR with Rule of 78’s pre-payment penalty
24%
