Credit is immediate purchasing power that is exchanged for a promise to repay borrowed money at a later date.
As of December 2012, American consumers owe $11.31 trillion in debt. Of this, $858 billion is credit card debt (a 7.1% increase from December 2011). www.annualcreditreport.com is a central site that allows individuals to request a free credit file disclosure (aka ‘credit report’), once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.
Businesses sell goods and services on credit because some customers cannot afford to pay cash and because they must keep pace with competitors who offer credit. Respond to the following:
How could an individual get into financial trouble by using a credit card?
If an individual were in trouble because of credit-card debt, what steps could he/she take to reduce his/her debt?
