Part 1: Introduction to consumer credit
The several ways that crooks use to steal identity include;-
Lifting of owner identities from stolen or forged credit card and driving licenses which are then used for criminal purposes
Pilferage of credit card numbers and charging merchandise to the victim’s account.
The crooks using the victim’s name date of birth and social security number to take over personal financial information which includes setting up new ones.
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One is likely to discover about their stolen identity when their cheques begin to bounce or when the collection agencies begin to call due to delayed fulfillment of obligations. This occurs when one is sure of the amount they have in their accounts and the extent to which they can service their bills.
There are a number of measures that one will need to carry out in order to keep their identity safe from theft. They include:
The protection of personal social security number by placing them in a secure location and avoid carrying it around.
Avoid providing of the social security number to any party and doing so only when necessary.
Ignoring emails that request for personal financial information.
Shredding of discarded financial records as well as pre-approved credit card applications.
Checking personal credit reports on a regular basis and protecting your identity by giving it a low profile.
To ensure that your credit cards as well as financial information are secure, one will need to ensure that they protect the information without identifying them to a third party that do not have authorization from the financial institution concerned. It also involves being in constant communication with the financial institution so as to keep updated about your credit performance on a regular basis. This will enable you to identify any anomaly that is related to your credit performance.
Part 2: Choosing a Source of Credit: The Costs of Credit Alternatives
The most important item provided in the disclosure statement is the difference in the amount of money that the financial institution will offer to their client and the amount that she will have to repay. It brings forth the importance of comparing the cost of credit offered by different credit facilities that come with the difference in amount paid and the period in which the credit facility will be serviced. This will make it easier for the individual seeking credit to make an informed choice based on the data they have at hand,
The items included in the finance charge of both credit offering financial institutions include;
The amount of credit that will be offered to or on behalf of a client
The rate of interest charged by the financial institutions for the credit offered
The total amount that will be replayed by the client as ate the maturity of the credit
The periodical amounts that the creditor will be repaying to the financial institution
The amount of money that will be provided to Sue to finance the purchasing of the vehicle is $6,000 which she will add to her $2,000 savings to make a total of $8,000 which is needed to purchase the motor vehicle. The loan contract will require that she repays 7487.64 at the end of the maturity period of the credit facility which requires that she makes a monthly repayment of $207.99.
Part 3: Consumer Purchasing Strategies and Legal Protection
Based on McKenzie’s experience of shopping for a new car on an online platform, there are a number of benefits and drawbacks that are associated with the experience. They are listed below
The benefits of the purchasing arrangement
It is a relatively easier platform where an individual can identify their preferred car and purchase it at the shortest time possible.
The purchaser is able to compare among the offers of a variety of car dealers and choose whichever suits them in the shortest time possible
The purchaser will have the advantage of having the car delivered to her preferred location by the car dealer
The drawbacks of the online purchasing arrangement
It denies the individual making the purchase the opportunity to physically examine the samples and choose the one that suits their preference.
The car delivered to them could be in some cases different from which they selected and ordered from the online platform
2. The additional actions that McKenzie will need to take before her purchase the motor vehicle on an online purchasing platform include;
Searching and comparing more than one vehicle type offered by several car dealers
Comparing the prices of cars that are offered by different car dealers
3. The benefits of shopping online for motor vehicles and other items
It gives the buyer the opportunity to make comparisons among the types available and make an informed choice
The buyer is able to compare the prices of motor vehicles and other items they intent to purchase
It is easier to read the description of the items on an online platform making it easier to choose whichever suits their needs
The payment for the preferred items is easy because they can be done electronically which enables them to avoid the carriage of cash.
The drawback of shopping online for motor vehicles and other items
There could be a delay in the delivery of the item ordered
There is a lack of examination of the item by the buyer
It is difficult to make credit purchases on online shopping platforms
The online shopping platform full of online frauds that has made so many people loses their financial resources.
Part 4: The Housing Decision: Factors and Finances
The possible sources for the down payment for the Bensons’ mortgage arrangement could be obtained from the diversion of the amount that was initially meant for monthly rent payments, their savings and the use of funds from mortgage insurance scheme.
This kind of financing would probably require that they subscribe to a mortgage financing insurance scheme. The concerns of Carla and Keegan in this case are that this could result in financial difficulties to them especially if the housing prices decline. This might make them consider closing costs as well as the real estate commission in order to have the financial ability to finance the mortgage.
There are a number of recommendations for the Bensons before they go ahead with the purchase of a new home. They include;
They will need to involve the input of housing financing experts before making a decision
They need to shop widely by comparing the offers of real estate organizations to enable them choose the most customer friendly mortgage
They will have to monitor the economic situation of the nation because a rise in the rate of inflation will have a negative effect on their ability to finance the mortgage
It is recommended that the Bensons buy a home from a real estate company rather than through a financial institution. This is because purchasing a home through a bank will increase the cost of financing significantly.
Part 5: Property and Motor Vehicle Insurance
The purpose of insurance is to pool risks and get compensated if one of the contributors encounters the risk being insured. It is important for people who rent to have insurance because most landlords have insurance that cover the building and not the tenant’s property and will not be compensated in case of a risk occurrence. This makes it important for the tenant to have an insurance scheme for their property as well as the provision of financial resources that will be needed to sustain the insured’s daily lives in case of a risk occurrence.
The building owner’s property insurance scheme is meant to cover the building and not the property of the tenants residing in the building. This involves the coverage of the building and consequent replacement incase of the occurrence of a risk which don’t extend to the property of those individuals living in the building. It is therefore important that the tenants subscribe to their personal property insurance to protect them against loses in case of a risk occurrence.
The cash value of the property is the value market value of the property during the time of risk occurrence. This implies that the compensation could be way below the buying price due to depreciation. The replacement value on the other hand is the compensation would involve the purchase of new property at the current market price by the insurance company.
When shopping for rent’s insurance scheme, one needs to ensure that the policy covers personal belongings starting with those that are costly to replace such as home entertainment system. The insurance scheme should also cover that will make the insurer provide the insured with living funds if they are disposed by fire or any other risk that could alter their day to day way of living.
