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  • Paying For Them Immediately Upon Delivery. (POWER) : The Nature and Functions of Credit

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    Crystal Valdez
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    Credit allows individuals and businesses to obtain goods and services without immediate payment by establishing a payment obligation over time. Credit limits are fixed for a period and the credit volume available may change depending on use and repayment. Individuals use credit for large purchases like homes, vehicles, education, and weddings, while businesses rely on credit for payroll, inventory, construction, and refinancing existing debts. Effective credit follows seven principles including use for productive purposes, consideration of the individual's character and ability to repay, structured disbursement, proper use of funds, timely repayment, and protection of lenders.

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    Credit allows individuals and businesses to obtain goods and services without immediate payment by establishing a payment obligation over time. Credit limits are fixed for a period and the credit volume available may change depending on use and repayment. Individuals use credit for large purchases like homes, vehicles, education, and weddings, while businesses rely on credit for payroll, inventory, construction, and refinancing existing debts. Effective credit follows seven principles including use for productive purposes, consideration of the individual's character and ability to repay, structured disbursement, proper use of funds, timely repayment, and protection of lenders.

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    8 views2 pages

    Paying For Them Immediately Upon Delivery. (POWER) : The Nature and Functions of Credit

    Uploaded by

    Crystal Valdez
    Credit allows individuals and businesses to obtain goods and services without immediate payment by establishing a payment obligation over time. Credit limits are fixed for a period and the credit volume available may change depending on use and repayment. Individuals use credit for large purchases like homes, vehicles, education, and weddings, while businesses rely on credit for payroll, inventory, construction, and refinancing existing debts. Effective credit follows seven principles including use for productive purposes, consideration of the individual's character and ability to repay, structured disbursement, proper use of funds, timely repayment, and protection of lenders.

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    © All Rights Reserved
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    THE NATURE AND FUNCTIONS OF CREDIT

    Credit-own of a person to obtain goods, or services without the requirement of


    paying for them immediately upon delivery. (POWER)

    debt - Amount/any remaining portion of the original amount (OBLIGATION)

    Credit - Limit is fixed for a given period (FIXED)

    Credit volume -May increase or decrease from time to time (CHANGEABLE)

    credit - Means by which one may acquire the right to use wealth

    Wealth - Any material or physical thing that satisfies a human want, provided that
    is, limited in amount.

    USERS OF CREDIT
    1. Consumers
    House and lot
    Motor Vehicle
    Household Appliances
    Travel Wedding Expenses
    Educational Services
    Clothing and Jewelry
    2. BUSINESS

    Payroll
    Purchase of Merchandise
    Construction of building facilities
    Purchase equipment
    Refinancing of maturing debts

    3. Government
    Even local government resort to borrowings when expected
    revenues fall short of program expenditures.

    7 P's of Credit
    principles of productive purposes
    principles of personality principles of productivity
    principles of phased disbursement
    principles of proper utilization
    principles of payment
    principles of protection

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