ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Future income is tied up in credit payments. If you use credit, part of everything you earn in the future will go toward what you bought in the past. Extra fees add to the total cost. Credit card companies are collecting higher late and over-the-limit fees which add to the total cost of credit.
Detailed explanation-2: -Why are you spending future income when using credit? You are spending future income because you have to pay back the amount you borrowed (and may have to pay interest too) at a later date.
Detailed explanation-3: -When you use your credit card to buy something, you are borrowing money. Some people use a credit card to buy things they cannot afford right now. Some people use a credit card to help build or improve their credit history. Sometimes it is just easier not to carry cash.
Detailed explanation-4: -Revolving Credit. This form of credit allows you to borrow money up to a certain amount. Charge Cards. This form of credit is often mistaken to be the same as a revolving credit card. Installment Credit. Non-Installment or Service Credit. 21-Feb-2014