Semester Review

Thursday June 6, 2013 – Periods 2, 3, 6, 7

thinkingcapwhoa_color

42l

Scams and Schemes

Wednesday June 5, 2013 – Periods 2, 3, 6, 7

Millions of credit transactions are completed each day. In the vast majority of cases, both parties to these transactions benefit. But the world is not a perfect place. The credit industry, like any other industry, has a few people who operate on the edge. Some of these people are flat-out thieves. Others operate businesses that, while completely legal, can put people who are already in financial trouble into positions from which they will find it even more difficult to recover. Not all financial scams and schemes involve credit. Some deal with investments. They appeal to your desire to make a bundle of cash overnight. But, if any sales pitch sounds too good to be true, it probably is. Scams and schemes include identify theft, loan scams, and credit-repair loans. There are also legal but high-cost credit practices, such as payday loans and rent-to-own plans.

42l

Credit Protection

Tuesday June 4, 2013 – Periods 2, 3, 6, 7

Consumers may take on too much debt, or misunderstand the terms of their credit agreements, or be victims of fraud. In these cases, consumers may face serious personal and legal difficulties. For such difficulties, federal and state laws provide consumers with certain protections. The applicable laws include the Truth in Lending Act, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Debt Collection Practices Act, the Electronic Funds Transfer Act, and the Fair and Accurate Credit Transactions Act. State credit-protection laws vary from state to state. You can contact your state bureau that handles such matters to learn more.

42l

Credit Choices

Monday June 3, 2013 – Periods 2, 3, 6, 7

In deciding whether to use credit, we must consider many factors. The considerations are often situation-specific and subject to different interpretations by different prospective borrowers. The underlying question in each case is whether the advantages of using credit would outweigh the disadvantages of using various forms of credit. We will examine four hypothetical cases considering the use of credit.

42l

Credit

Friday May 31, 2013 – Periods 2, 3, 6, 7

What is credit? Credit means obtaining the use of money that you do not have To obtain credit you convince someone, usually a financial institution like a bank, savings and loan, credit union, or a credit card company, to provide a loan to you in return for your promise to pay the borrowed money back plus interest. Some people are afraid of using credit. Other people are fearless about using credit. Used in a good way, credit can be a tremendous help to you now and in the future. Used in a bad way, credit can result in harassment from creditors, broken relationships, and bankruptcy.

When approving a loan to an individual, lenders look for the “Three Cs”: character, capacity, and collateral. Character refers to your history of credit use is found in your credit report. Capacity examines the applicant’s income to see if the borrower can comfortably make the payments on the loan amount requested. Collateral is to secure a loan and can be used to repay the debt in case the borrower defaults on the loan.

State and federal laws are designed to protect credit consumers from dishonest business practices. Two of the more important consumer-credit protection laws are the Truth in Lending Act and the Fair Credit Reporting Act. Then there are the scheme artists and swindlers who prey on people’s greed or financial fears.

42l

Big Risk Simulation

Thursday May 30, 2013 – Periods 2, 3, 6, 7

The decision to buy insurance depends on individual judgment about the future. The general guideline is not to allow a large portion of potential loss to remain uninsured.

You have just graduated and you are single. You own a number of assets that you are thinking of insuring, including an automobile, inherited jewelry, a rare coin set, and the contents of your rented apartment. Your employer provides a health insurance plan you can purchase. Examine the cost and the risk of each of the things you would like to insure. Do not spend more than $2,900. You may spend less.

The simulation represents five years. A card will be pulled from a deck of cards and the number represents the item or items affected by the unexpected events during that particular year. For example, if a “6” is selected, the following insurances are affected: automobile, health, and disability.

42l

Insurance

Wednesday May 29, 2013 – Periods 2, 3, 6, 7

As people begin to earn an income and acquire assets, they begin to think about how to protect what they have against the risk of financial loss. Insurance is usually not regarded as a hot topic, but that may be changing. The ongoing debates about how best to provide health insurance to American families that do not currently have coverage illustrate the importance of this topic.

Understanding insurance begins with understanding risk. Life is filled with risk. Virtually every decision involves risk, some more than others. The purpose of insurance is to spread risks out over many people. Fundamentally insurance companies work by charging a fee (a premium) paid by customers to provide protection against certain types of loss. The fee or premium covers the losses and also the costs of operating the business and earning a profit.

42l