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    AMBER HUSSAIN - Wonderful World of Credit Activity

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    AMBER HUSSAIN
    1. A creditor is any person or business that grants a loan or sells goods/services on credit. A debtor is any person or business that receives a loan or buys goods/services on credit. 2. Credit allows for the instant enjoyment of goods/services before payment, as well as convenience when cash is not available. However, it also carries costs like interest charges. 3. Different types of entities use credit - consumers use it for purchases, the government borrows for public services, and businesses borrow for both long and short-term needs like equipment, cash flow, and consolidating payments.

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    AMBER HUSSAIN - Wonderful World of Credit Activity

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    AMBER HUSSAIN
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    1. A creditor is any person or business that grants a loan or sells goods/services on credit. A debtor is any person or business that receives a loan or buys goods/services on credit. 2. Credit allows for the instant enjoyment of goods/services before payment, as well as convenience when cash is not available. However, it also carries costs like interest charges. 3. Different types of entities use credit - consumers use it for purchases, the government borrows for public services, and businesses borrow for both long and short-term needs like equipment, cash flow, and consolidating payments.

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    AMBER HUSSAIN - wonderful world of credit activity (1)

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    1. A creditor is any person or business that grants a loan or sells goods/services on credit. A debtor is any person or business that receives a loan or buys goods/services on credit. 2. Credit allows for the instant enjoyment of goods/services before payment, as well as convenience when cash is not available. However, it also carries costs like interest charges. 3. Different types of entities use credit - consumers use it for purchases, the government borrows for public services, and businesses borrow for both long and short-term needs like equipment, cash flow, and consolidating payments.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    15 views2 pages

    AMBER HUSSAIN - Wonderful World of Credit Activity

    Uploaded by

    AMBER HUSSAIN
    1. A creditor is any person or business that grants a loan or sells goods/services on credit. A debtor is any person or business that receives a loan or buys goods/services on credit. 2. Credit allows for the instant enjoyment of goods/services before payment, as well as convenience when cash is not available. However, it also carries costs like interest charges. 3. Different types of entities use credit - consumers use it for purchases, the government borrows for public services, and businesses borrow for both long and short-term needs like equipment, cash flow, and consolidating payments.

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    © All Rights Reserved
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    Credit is the privilege of using someone else's money for a period of time.

    A creditor is any
    person or business that grants a loan or sells on credit. A debtor is any person or business
    that buys on credit or receives a loan

    1. Instant enjoyment: enjoy buying 1. Credit costs: interest charges are added to
    goods/services immediately. the purchase price
    2. Convenience: replaces the need for cash 2. impulse buying: easily available credit
    3. Help in emergency makes it very easy for consumers to impulse
    4. Saving money: taking advantage of sales buy
    5. credit rating: indicates level of risk if credit 3. Overbuying: leads to making more
    were given to them purchases than people need or can afford
    6. monthly statement: useful record to help 4. Financial difficulties: end up with difficulties
    budget and track spendings. and debt if consumer overspends

    they use credit a lot, especially to buy expensive items because credit is

    more convenient than cash. Examples include a home, a car, a vacation, and sometimes
    to make investments or pay off debt

    The government borrows money to provide goods and services to citizens.


    For example, to build schools, hospitals, highways, airports, and buses, and to pay
    salaries of government employees.

    they use long term credit to purchase land, buildings and equipment.
    Businesses may also borrow for short term reasons such as it might need credit while it
    waits for goods in stock to be sold.
    1. Major purchases: borrow money to
    finance major purchases 1. Increased costs: interest is charged on
    2. consolidating payments: instead of paying all loans, resulting in increased costs.
    for each delivery, a business may get a bill 2. defaulting on a loan: if a company is
    3. company cards: allow employees to make unable to pay a loan, the organization that
    work related purchases without the hassle of gave the loan is entitled to seize assets of
    cash and reimbursements the company.
    4. overcome cash flow shortages: many
    business are cyclical, so they may need to
    borrow money during certain months of the
    year

    1. Accepting universal credit cards

    2. act as an intermediary between customer and a financial institution that offer credit.
    3. offer their own form of credit to reliable customers. This is common in business to

    business transactions.

    The company might not pay the supplier back, or declare bankruptcy. This way, the

    supplier won't be able to collect the credit they granted the other business.

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