Consumer Credit

Extracted Attributes

• Types

  Revolving credit (e.g., credit cards, overdrafts) and nonrevolving credit (e.g., motor vehicle loans, education loans, boat loans, recreational vehicle loans).

• Purpose

  Allows consumers to finance expenditures for which they do not have the funds, used to purchase consumer goods and services.

• Mechanism

  A lender or credit intermediary lends a set sum, which the consumer repays within a specified period, paying for the service in the form of interest and fees.

• Definition

  Trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately, but promises either to repay or return those resources at a later date.

• Regulation

  Subject to specific legislation, including restrictions on costs and a 14-day cooling-off period for consumers.

• Historical Impact

  Changed the American aversion to debt.

Timeline

• Organizations like General Motors pioneered consumer credit, fundamentally changing the American aversion to debt. (Source: Related Document)

  Around 1919

• The expansion of consumer credit led to a massive expansion of leverage and contributed to the speculative bubble preceding the Stock Market Crash of 1929. (Source: Related Document)

  Pre-1929

• Discussions draw parallels between the historical role of consumer credit and current market trends, such as investments in AI and the private credit market. (Source: Related Document)

  Modern Era

Credit

Credit (from Latin verb credit, meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt), but promises either to repay or return those resources (or other materials of equal value) at a later date. The resources provided by the first party can be either property, fulfillment of promises, or performances. In other words, credit is a method of making reciprocity formal, legally enforceable, and extensible to a large group of unrelated people. The resources provided may be financial (e.g. granting a loan), or they may consist of goods or services (e.g. consumer credit). Credit encompasses any form of deferred payment. Credit is extended by a creditor, also known as a lender, to a debtor, also known as a borrower.

Web Search Results

• Consumer credit | FSMA

  Consumer credit is a type of loan that allows consumers to finance expenditures for which they do not have the funds. This type of loan is used to purchase consumer goods and services. How does it work? A lender or credit intermediary lends the consumer a set sum. The consumer pays the loan back within a specified period and pays for this service in the form of interest and fees. [...] Consumer credit is subject to specific legislation. The law restricts costs that are allowed to be charged for consumer loans. All consumers who get a consumer loan have a 14-day cooling off period within which they can cancel it without stating reasons. What is the FSMA’s role? [...] With the Credit Calculator (French - Dutch), you can calculate the duration and cost of your credit. Think carefully before choosing a loan. The "Thoughtful Borrowing" Checklist (French - Dutch) may help you make the right decision. There are several types of consumer credit. The most well-known formula is a repayment loan. Credit cards or overdrafts on current accounts are other common forms of consumer credit. What rules apply?

• Consumer Credit - G.19 - about - Federal Reserve Board

  The G.19 Statistical Release, "Consumer Credit," reports outstanding credit extended to individuals for household, family, and other personal expenditures, excluding loans secured by real estate. Total consumer credit comprises two major types: revolving and nonrevolving. Revolving credit plans may be unsecured or secured by collateral and allow a consumer to borrow up to a prearranged limit and repay the debt in one or more installments. Credit card loans comprise most of revolving consumer [...] credit measured in the G.19, but other types, such as prearranged overdraft plans, are also included. Nonrevolving credit is closed-end credit extended to consumers that is repaid on a prearranged repayment schedule and may be secured or unsecured. To borrow additional funds, the consumer must enter into an additional contract with the lender. Consumer motor vehicle and education loans comprise the majority of nonrevolving credit, but other loan types, such as boat loans, recreational vehicle [...] <table class="statistics" cellpadding="0" cellspacing="0"><tbody><tr><td class="indent1"><em>Owned</em></td></tr><tr><td class="indent1" valign="top" width="317">Revolving credit = Revolving consumer credit</td></tr><tr><td class="indent2" valign="top" width="317">Revolving consumer credit: DFCR1682</td></tr><tr><td class="indent1" valign="top" width="317">Nonrevolving credit = Consumer motor vehicle loans + other consumer loans</td></tr><tr><td class="indent2" valign="top" width="317">Consumer

• Understanding Credit - Financial Aid & Scholarships

  Credit is the ability of the consumer to acquire goods or services prior to payment with the faith that the payment will be made in the future. In most cases, there is a charge for borrowing, and these come in the form of fees and/or interest. ## Establishing Good Credit A good credit score can impact multiple areas of your life, including your ability to rent or buy a house, job opportunities, loans, and more, so establishing a good credit score now will pay off in the future. [...] ## What is Considered a Good Credit Score? The FICO credit score ranges from 300 to 850, with the lower scores representing higher credit risk. A good credit score is generally considered to be anywhere from 690 to 850, with 850 being an excellent credit score. Here are ways to start establishing good credit: Open a checking and savings account Pay bills on time Pay down outstanding balances Check credit report yearly Protect your identity Five Components of a Credit Score [...] A credit report contains your personal information along with your overall credit history, inquiries made by companies to view your credit information, and more. Checking your credit report frequently will prevent inaccuracy in your credit information that may lead to a lower credit score and consequently, the denial of credit, loans, or even a job. Tip: Remember to check the name, address, birthdate, Social Security number, and accuracy of accounts on your credit report.

• Consumer Loans & Credit Cards | MyCreditUnion.gov

  or credit union. [...] View Consumer Loan Calculators Buy Now, Pay Later [...] documents.

• What are the Different Types of Consumer Debt? - Equifax

  Type of loan: Credit card debt is considered a revolving account, meaning you don’t have to pay it off at the end of the loan term (usually the end of the month). It’s also an unsecured loan, which means there isn’t a physical asset like a house or car tied to the loan that the lender can repossess to cover the debt if you don’t pay up. [...] debt with an initial reported balance under $500 is no longer included on U.S. consumer credit reports. [...] Type of loan: Like a mortgage, an auto loan is a secured installment loan. It’s paid in a set number of payments over an agreed-upon period of time (often three to six years). If you stop making payments, the lender can repossess your car and sell it to get back its money. Interest rates: The longer the term of your loan, the lower your interest rate will probably be. Many auto companies offer low- or no-interest financing deals for individuals with good credit.