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7.02 A Who Uses Credit?

7.02 A Who Uses Credit?. PERF Objective 7.02 Students will understand the users of credit. Who Uses Credit?. Consumers Credit used by people for personal reasons consumer loans, mortgage loans, credit cards, charge card Businesses

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7.02 A Who Uses Credit?

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  1. 7.02 A Who Uses Credit? PERF Objective 7.02 Students will understand the users of credit.

  2. Who Uses Credit? • Consumers • Credit used by people for personal reasonsconsumer loans, mortgage loans, credit cards, charge card • Businesses • Credit used by businessescommercial loans, corporate bonds • Government Credit • credit used by local, state, federal governments • Municipal bonds • Savings bonds • T- bonds, T-bills, T-notes

  3. Government Credit USA IOU trailer link • Federal government - uses credit to pay for: • Public services and programs provided for its citizens • Examples-military, foreign aid, roads, courts, prisons • Loan sources include: Federal savings bonds, treasury bills, bonds, notes • State & local governments-use credit to pay for: • highways, water systems, public housing , and stadiums, airports • Loan sources : municipal bonds, school bonds

  4. Government Credit • Municipal Bonds • State and local governments use to finance projects • Savings Bonds • Sold by federal government • T-bills, T-notes, T-bonds

  5. Bonds Bonds – written promise to repay a loan with interest on a specific date Buyer of the bond is the creditor • Corporate Bonds • Usually used to finance buildings and equipment • Blue chip companies vs. junk bonds • Part of investment portfolio Bond is an investment for creditor/Loan for the issuer

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