Saving And Managing Credit Flashcards
1
Q
What are some of the reasons for saving ?
A
- retirement and investing
- emergencies and peace of mind
- saving on interest
- for big purchase
- saving on cash purchases
2
Q
Name good saving habits
A
- start early
- a little every month
- automate saving process
- consider purchases carefully
- do not let income determine spending
- consider the returns
3
Q
What are bad reasons for borrowing money and what are the consequences of debt ?
A
Bad reasons :
- matching maturities
- spend on short term items that lose value quickly
- keeping up with neighbours
Consequences:
- bad credit record
- loss of possessions
- household stress and conflict
4
Q
What are some of the good reasons for borrowing ?
A
- to buy a major, long-life asset that is really needed
- to make a high-return investment
- to fund education
- to take advantage of an opportunity
- as bridging finance
- in emergencies
5
Q
Name the four C’s of credit
A
- Capacity
- Capital
- Collateral
- Character
6
Q
Name the different types of credit structures
A
- Non-instalment credit
- Instalment credit
- Revolving credit
7
Q
Name the different forms of credit
A
- Credit cards
- Store cards
- Bank overdrafts
- Personal loans
- Motor vehicle finance
- Home loans
8
Q
Name the different criteria that makes up your credit score
A
- Individual’s historical payment history
- Amount of available credit used
- Length of individual’s credit history
- Types of credit being utilised
- Frequency of enquiries into your credit record
9
Q
Name the bad credit habits
A
- Not reading the credit terms
- Not determining what the debt really costs
- having an excessive number of credit cards
- skipping payments
- using debt to pay other debt
- not paying off debt as quickly as possible
10
Q
Name the actions to improve a bad debt situation
A
- admit the problem
- determine what the reasons are
- reduce expenses
- re-negotiate payment terms with creditors
- consolidate debts
