e) Recognizing sources of credit

  • View and think about the video.

  • Complete the handout "Sources of Credit" to identify places that an individual can go to obtain credit. This handout lists six sources.
  • Consumer credit can be obtained from a variety of sources including banks, credit unions, finance companies, many retailers, and service providers such as utility companies and physicians. In addition, some investors may be able to tap their investment accounts or retirement accounts. Policy holders who have a cash-value life insurance policy can obtain loans based on the cash value built up in the policy. Pawnshops check cashers, and rapid-refund services are some of the “alternative lenders” that extend credit.
Beware the dangers of loan sharks, cash advances from credit cards, pawnbrokers, and other such operations. These sources provide credit with particularly high interest rates and make it difficult, if not impossible, to build wealth...