Evaluate the various methods of financing a purchase.

Evaluating the various methods of financing a purchase (e.g., loan, installment plan, layaway, credit card) should include use of a decision-making model, as well as the following actions:

• Defining terms used to describe credit
• Examining the opportunity cost of credit
• Weighing risks involved in no-payment/no-interest financing
• Explaining the types of credit (open- and closed-end, service credit, flex pay, secured and unsecured loans)
• Describing sources of credit and the associated interest rates and fees (retail stores, banks and credit unions, finance companies, pawn shops, payday loans, title loans, private lenders)
• Determining the best type and source of credit for sample purchases
• Verifying the credibility of online lenders

Teacher Resource:

Bureau of Financial Institutions, Virginia State Corporation Commission (SCC) Links to an external site. (https://www.scc.virginia.gov/pages/Bureau-of-Financial-Institutions)