CREDIT SYSTEM.

( PRESENTOR NUMBER 6 )

JANINE

C H A R L E N E D E X T E R

M E M B E R S

KAREN

What is Credit?

Development of Credit. Foundation of Credit. Characteristic of credit card. Classes of Credits. Credit Contract and Characteristics.

Credit Credit
Is a borrowed money that you can use to purchase things you need when you need them and then repay the funds back at an agreed on time.

Development of Credit

One of the most remarkable phenomena of modern financiering is the Power of Credit. Power Credit.

Development

of Credit Credit

Credit has taken the place of money

to a large extent in a larger transaction of commerce. two fundamental elements of credit: confidence time

Development of Credit
plays an important part in all operations of credit, it is not the only element of importance which they involve. indeed, the amount of credit given as the result of confidence alone is but a small part of the volume of credit transactions, Such transactions are usually accompanied by guarantees and securities which reduce the risk to the minimum.

Confidence

The other element which plays a dominating part in credit transactions is that of time. The interest rate and the discount rate, which in this case operate in a somewhat similar manner, constitute the difference between the present value and future value of capital commodities. The amount of credit or money which is granted, for instance.

PARTS OF CREDIT CARD

PARTS OF CREDIT CARD

This confidence is two fold in character:

At first, the lender must feel morally certain that the borrower will be able to pay his debt. In second, the lender must feel certain that the borrower is a man of integrity. The lenders confidence is founded upon the property of the borrower as well as upon his character.

mans ability to pay a debt usually depends upon his ability to sell goods, and that depends upon the ability of people to buy the goods and pay for them. Therefore, the confidence upon which credit is based is rooted in general business conditions.

When times are brisk and the demand for goods is temporarily outrunning the supply, the credit of any individual is much better than when opposite conditions prevail. According to some writers,

Credit is

the power to convert goods into means of payment a transfer of goods in consideration of a promise of a future return of equivalent value.

What is good for one customer is not always good for another, therefore it is absolutely essential to consider all the range of factors such as interest rate, fees, rewards and member benefits.

Eight key factors one should search for and compare in credit card offers.
1. ) Type of card. Credit cards are all card. different, but they can be divided into three main groups: secured cards, cards, ones. regular cards and premium ones. 2. ) Grace period the number of days by the end of which you have to pay your bill in full. full.

3. )

The method of calculating the financial charge the dollar amount you

give to use credit, which is partially influenced by your outstanding balance and the so-called annual percentage rate, or APR. Companies employ a variety of techniques to calculate your outstanding balance, and the way they do that can have a major impact on the financial charge.

4.) Fees be sure to know if a card has annual fees, late payment fees, foreign transaction or any other fees. 5.) Cash advance features this is especially important if you are going to use cash advances, so get detailed information about access to ATM and so on. 6.) Credit limit some cards set their .) own credit limits.

7.)

Rewards and bonuses - These can

include various extra points, gifts and services for you to enjoy your credit card more.
8.) Interest rate it can be fixed or changeable. Although you might think that there is less risk with a fixed rate card, it is not necessarily true. Federal law permits any changes in the card policy, including its rate.

While deciding what kind of credit card is the best and the most convenient for you, keep in mind that credit cards all have their own terms and conditions, which you need to examine and compare carefully before you complete an application and take the responsibility.

The 5 Characteristics of a Good Credit Card Agent

1. An In-depth Knowledge of the Card InCompany
Your credit card agent should know the ins and outs of the company he or she is representing. If representing. your agent has an intimate knowledge of the company, he or she will know the range of credit products available and which one will best fit your need. need. Agents who are only looking for a quick commission won't help you much when you have inquiries about their cards. cards.

2.

Honesty

There are some agents who will lie and fib just to get you to sign on the dotted line. Thus, after talking with your agent, investigate the veracity of his or her claims. You can do this by calling the customer service of the card company or bank that the agent is representing. If you found the your agent is exaggerating, drop communications with him or her immediately. A good agent will support his or her claims with statistical evidences.

3. Experience Established credit card agents usually have had extensive experience in dealing with their clients and are in a better position to help you out. They out. will place your interest before theirs and will not recommend any products until they have a firm grasp of your need and financial situation. New situation. agents may be over-zealous in serving you but as overlong as they are sensitive to your needs, you should not dismiss them. them.

4. Pros and Cons Analysis Good agents will tell you like it is. They is. will explain and analyze the pros and cons of the products to you without diminishing your enthusiasm for their card. These card. people will give you more information so that you can make informed decisions. decisions. These are the agents that will have many loyal customers. customers.

5. No hard selling Good agents do not hound you all day long. Any long. agents who do this are most likely concern about his or her self-interest and commission only. They selfonly. are unlikely able to do a proper recommendation that fit your need and financial situation. If you situation. are really interested in their company cards, you may want to ask the card company to send you another agent. Good agent will be willing to spend agent. some times with you to understand your need and make sure you will receive the right products that will benefit you. you.

Positive and Negative characteristics of Credit Card Company Positive Characteristics

Whenever I think about American Express, the first thing that comes in my mind is convenience. They are truly the best customer service provider out there. The things are managed by them quickly and efficiently, making them my go-to credit card issuer. With them it is quite easy to dispute charges and they never make us wait to get a live representative on the phone. Large lines of credit are also provided by them, which is always an additional thing for the responsible cardholder.

Negative Characteristics
American Express has got only a single drawback and that is the fact that there credit cards are not accepted by all merchants. In fact, now such merchants. merchants are present everywhere who will not accept American Express as a payment option. Amex option. cardholders encounter this problem because Amex charges higher transaction fees, and also due to the fact that in the event of a dispute they tend to favor cardholders rather than to take the side of merchants. merchants.

The Pros and Cons of Credit: Pros

You don't have to carry a large amount of cash all the time. Purchasing power increases because of the higher credit limit being offered to customers. Almost all major establishments accept credit cards. You can buy things online. Credit cards also serve those who frequently travel internationally

Cons
Uncontrolled spending can result in a bad financial situation. Credit cards are prone to security issues when spending online. Credit cards impose high interest rates and other applicable fees. So if you do not make the payments as soon as possible, you might end up paying more than the price of the item or service you purchased. !!!

A common and

serviceable classification divides credit into five kinds:

Personal commercial banking public investment credit

Classes of Credits
1.) Personal credit ~ this is currently taken to mean credit which affects the transfer of goods or money to an individual on his mere assurance and without security.

Classes of Credits
2.) Commercial credit ~ This is probably the broadest and vaguest term currently used, but is frequently taken to mean credit represented by all grants of time within which to settle for merchandise bought at wholesale for resale or manufacture.

Classes of Credits
3.) Mercantile credit ~ By this is usually meant credit which effects the extension of accommodation by retail merchants to their customers (consumers).

Classes of Credits
4.) Bank credit ~ By this is usually signified credit represented by loans and discounts by banks without regard to use.

Classes of Credits
5.) Public credit ~ By this is ordinarily indicated credit represented by the advances secured by treasuries through sale of bonds and certificates of debt.

Credit here is operating in three ways:

(1) as a transfer (2) as a grant of time (3) as a loan, accommodation, or loan, accommodation, advance.

CONTRACTS.
A contract is a legally enforceable promise. Contracts are vital to society because they facilitate cooperation and trust. trust. Rather than relying on fear of reprisal or the hope of reciprocity to get others to meet their obligations, people can enlist other people to pursue common purposes by submitting to contracts that are backed by impartial authority.

Without contracts and their supporting institutions, promises would be much more vulnerable to ill will, misunderstanding, will, forgetfulness, and other human flaws. Indeed, contracts allow people who have never even met to reach agreements, such as lending/borrowing money to buy a house, that they would never consider making outside of a legal framework.

What Does Credit Default Contract Mean?

Security with a risk level and pricing based on the risk of credit default by one or more underlying security issuers. Credit default contracts include credit default swaps (CDSs), credit default index contracts, credit default options and credit default contracts, basket options. Credit default contracts are also options. used as part of the mechanism behind many collateralized debt obligations (CDOs); in these cases, the contracts may have unique covenants that exclude company events, such as a debt restructuring as a "credit event". "credit event".

(CDS) is a swap contract in which the protection buyer of the CDS makes a series of payments (often referred to as the CDS "fee" or "spread") to the protection seller and, in exchange, receives a payoff if a credit instrument (typically a bond or event. loan) experiences a credit event.

credit default swap

CONTRACT ELEMENTS
As a legally enforceable promise, a contract differs from a simple verbal promise in that either party may ask the state to force the other party to honor its promise. To distinguish contracts from other types of promises and agreements, courts have established basic elements that are necessary for a contract to exist. A contract may be legally defined as a voluntary, legal, written agreement made by persons with the proper capacity

It should include: 1) an offer; 2) an offer; consideration, acceptance; and 3) consideration, or an acceptance; exchange of value. There are legal value. exceptions to most of these conditions, and all of them are subject to interpretation in the courts. Furthermore, some contracts do not meet these requirements, such as implied contracts and those created under promissory estoppels.

Consumer credit contract

A consumer credit contract must be concluded in writing. The borrower has a right to a copy of the contract. It contains information about: Net amount of credit. Right to revocation and notice of revocation. If applicable, requested securities. Part of income according to which the credit check was performed.

Effective annual interest or, if or,

not possible, annual interest and costs imposed upon contract conclusion. Conditions under which the interest rate and costs may be adjusted. Costs which may arise and are not included in effective annual interest.

END