Question

1) What is consumer credit? List two good reasons to borrow and two unnecessary reasons to borrow. What forms of consumer credit do you have? Which is the costliest? What can you do to lower the credit costs? Suppose you just received your credit card statement and noticed a charge to a store that you have never patronized. What steps should you take to handle this? Name three free sources whereby you can obtain credit scores (not just reports) from all three credit reporting bureaus. 2) What common tax-saving methods are available to most individuals and households? Per your chosen career (position and geographic area), determine the average salary with this tool: Salary (Links to an external site.)Links to an external site. (Links to an external site.)Links to an external site. (Use lower band amount if entry level) Once you obtain the salary information, calculate your actual taxes (make your own assumptions per your personal situation for deductions, etc.) via the Taxact calculator: Taxes (Links to an external site.)Links to an external site.

Answer 1

1. Consumer credit is the loan or advance given to the consumer to buy everyday products or services. Credit card is an example of the same. Two good reasons to borrow can be medical and educational reasons and two unnecessary reasons to borrow can be buying luxurious items and bearing increased everyday expenses. I have two forms of consumer credit which are car loan which is a closed-end credit and credit card which is an open-end credit. Credit card is the costliest consumer credit because it allows us to spend on items we wish to without any restrictions to the limit it holds. Hence the expenditure made through credit cards are usually higher in amounts and made on unnecessary items. Also, the payment of the credit card can be made partially paying the minimum due. After which a high interest is charged on the remaining amount. All these factors make the credit card a costly form of consumer credit.

If I received my credit card statement and noticed a charge to a store that I have never patronized then I will first contact the store merchant who made the transaction and will try to get a reverse entry from there itself. The source where the dispute took place will be my first option to contact. After this, I will contact my credit card company and inform them about the misuse of my card. I will get my card blocked for further safety. I should have the receipt of the transaction as evidence. Other than this I will inform the credit bureau informing about the misuse of my credit card.