2. Credit Notes

3. Truth in Lending Act – The law which requires a Lender to state total finance charges and annual interest percentage rates. Equal Credit Opportunity – The law which prevents denial of credit because of race, creed, sex, or marital status.

4. Factors which creditors use to determine whether to offer you credit: 1. Capacity – Your ability to earn enough income to cover payments. 2. Collateral – Your savings, investments, or possessions that could be used to repay a debt. 3. Character – Your reputation for being stable and dependable.

5. Advantages of Credit 1. Develop a credit history 2. Convenience 3. Take advantage of sales 4. Emergency use

6. Disadvantages of Credit 1. May develop a poor credit history 2. Overspend 3. Tend not to shop around 4. Expensive