Global Credit AvailabilityEssay Preview: Global Credit AvailabilityReport this essayTim HarrisPersonal Finance 201February 25, 2005Global Credit Availability:In todays world of personal finance and economics, with the global perspective being the primary focus. Corporations, just like individuals, are looking at expanding their horizons and saving or making as much profit as they can. How do they accomplish this gigantic and often expensive proposition? The answer to this is through credit. However I poise a question to everyone. Is the ease of which to receive credit today a hindrance and detriment to all of us, or is it the answer we have all been looking for? I will show you both sides of this situation and you are the judge.
A Brief History of Money and Personal Finance – by P.E. Phelan
[NOTE: This article was reprinted on the web based on my own interviews and a link to an online archive of the interview with P.M. Phelan was the only financial expert on the subject who provided a comprehensive review from my own perspective. It was taken from the website of the Financial Times (England) published by the same publication that published this book. The article is also available on the internet.]
[NOTE: The title of this book is “How do people save money? The Ultimate Solution”, a book we are writing as a personal financial course to which I’m also available as a part of this course! There is also a complete guide on how to earn money as an individual here: A Personal Financial Guide to Earn Money]
Budgeting for Personal Finance and Personal Finance: A Few Resources for New Entrepreneurs
[P.E. Phelan, M.P.
My own personal perspective, what it is and what it means, comes down to two things.. First, we want to save money. I think that’s important. First, it is for those of us here at the Financial Times (England)[1] to give credit where credit is due (to our financial institution and to others to whom we owe money, both in dollars and pesos). Second, I don’t believe in making investments with capital at all. But, while I don’t have to buy it or spend anything to buy it, I am responsible for paying into investments that I think might be profitable, and those funds are generally worth some return. I want to make money with my money, and I don’t plan to spend it but I’m not doing that. I don’t necessarily want to make it out of pocket, but I am doing that so my future income in the long run depends on whether and how I can support my family and my community – in particular to have it back on track and to invest in businesses and assets other than my own. However, I find it hard to see how any one of these things will be at all profitable, or not so profitable, for the long-run regardless of who’s contributing.
[P.E. Phelan, M.P.: One and the same: The Future of Personal Finance. P.E. Phelan. London: Sage-Rounds. 2012. p. 28.]
Personal Finance: An Introduction
Financial resources are not available to everybody. This article has an easy look at what it is and how to earn money. In this post I would hope that many of you as you become more experienced as a person and as well as more savvy as possible would be able to become more familiar with the basics of the topic from which I will apply them. However, as an essay I cannot give you
A Brief History of Money and Personal Finance – by P.E. Phelan
[NOTE: This article was reprinted on the web based on my own interviews and a link to an online archive of the interview with P.M. Phelan was the only financial expert on the subject who provided a comprehensive review from my own perspective. It was taken from the website of the Financial Times (England) published by the same publication that published this book. The article is also available on the internet.]
[NOTE: The title of this book is “How do people save money? The Ultimate Solution”, a book we are writing as a personal financial course to which I’m also available as a part of this course! There is also a complete guide on how to earn money as an individual here: A Personal Financial Guide to Earn Money]
Budgeting for Personal Finance and Personal Finance: A Few Resources for New Entrepreneurs
[P.E. Phelan, M.P.
My own personal perspective, what it is and what it means, comes down to two things.. First, we want to save money. I think that’s important. First, it is for those of us here at the Financial Times (England)[1] to give credit where credit is due (to our financial institution and to others to whom we owe money, both in dollars and pesos). Second, I don’t believe in making investments with capital at all. But, while I don’t have to buy it or spend anything to buy it, I am responsible for paying into investments that I think might be profitable, and those funds are generally worth some return. I want to make money with my money, and I don’t plan to spend it but I’m not doing that. I don’t necessarily want to make it out of pocket, but I am doing that so my future income in the long run depends on whether and how I can support my family and my community – in particular to have it back on track and to invest in businesses and assets other than my own. However, I find it hard to see how any one of these things will be at all profitable, or not so profitable, for the long-run regardless of who’s contributing.
[P.E. Phelan, M.P.: One and the same: The Future of Personal Finance. P.E. Phelan. London: Sage-Rounds. 2012. p. 28.]
Personal Finance: An Introduction
Financial resources are not available to everybody. This article has an easy look at what it is and how to earn money. In this post I would hope that many of you as you become more experienced as a person and as well as more savvy as possible would be able to become more familiar with the basics of the topic from which I will apply them. However, as an essay I cannot give you
A Brief History of Money and Personal Finance – by P.E. Phelan
[NOTE: This article was reprinted on the web based on my own interviews and a link to an online archive of the interview with P.M. Phelan was the only financial expert on the subject who provided a comprehensive review from my own perspective. It was taken from the website of the Financial Times (England) published by the same publication that published this book. The article is also available on the internet.]
[NOTE: The title of this book is “How do people save money? The Ultimate Solution”, a book we are writing as a personal financial course to which I’m also available as a part of this course! There is also a complete guide on how to earn money as an individual here: A Personal Financial Guide to Earn Money]
Budgeting for Personal Finance and Personal Finance: A Few Resources for New Entrepreneurs
[P.E. Phelan, M.P.
My own personal perspective, what it is and what it means, comes down to two things.. First, we want to save money. I think that’s important. First, it is for those of us here at the Financial Times (England)[1] to give credit where credit is due (to our financial institution and to others to whom we owe money, both in dollars and pesos). Second, I don’t believe in making investments with capital at all. But, while I don’t have to buy it or spend anything to buy it, I am responsible for paying into investments that I think might be profitable, and those funds are generally worth some return. I want to make money with my money, and I don’t plan to spend it but I’m not doing that. I don’t necessarily want to make it out of pocket, but I am doing that so my future income in the long run depends on whether and how I can support my family and my community – in particular to have it back on track and to invest in businesses and assets other than my own. However, I find it hard to see how any one of these things will be at all profitable, or not so profitable, for the long-run regardless of who’s contributing.
[P.E. Phelan, M.P.: One and the same: The Future of Personal Finance. P.E. Phelan. London: Sage-Rounds. 2012. p. 28.]
Personal Finance: An Introduction
Financial resources are not available to everybody. This article has an easy look at what it is and how to earn money. In this post I would hope that many of you as you become more experienced as a person and as well as more savvy as possible would be able to become more familiar with the basics of the topic from which I will apply them. However, as an essay I cannot give you
The term credit according to the 1992 issue of New Websters Dictionary is; a transfer of goods, etcin confidence of future payment, to enter on the credit side of an account; to procure credit or honor to (“Credit”). The term domestic credit in the Dornbusch Microeconomics book is the monetary authoritys holdings of claims on the public sector – government debt – and on the private sector – usually loans to banks (“Domestic Credit”). According to our Personal Finance book;
“Consumer credit dates back to colonial times. While credit was originally a privilegethe affluent, farmers came to use it extensively. No direct finance charges were imposed;instead, the cost of credit was added to the price of goods… All economists nowrecognize consumer as a major force in the American economy… To paraphrase an oldpolitical expression, as the consumer goes, so goes the U.S. economy (164).”These terms all mean one thing, as we the public, government, and businesses receive credit, we must be responsible with it and ensure that we repay our obligations.
In todays global economy credit is the single most important tool most consumers and businesses have. Credit when used properly allows us to grow and purchase items we might not otherwise have the funds for. The United States has had credit reporting information and accounting since 1956, and with all of this available information global models are now being created for other countries to follow. It is said that without the use and availability of credit the global economy for countries not easing up on their credit reporting will not grow and keep up with the rest of the world. In the report, Lessons from the U.S. experience;
“The full benefits of comprehensive credit reporting have yet to be realized in most othercountries, because the amount of personal credit history available to lenders for assessingrisk varies widely around the globe. Historically, credit reporting in most countries beganwith the sharing of so called “negative” information (delinquencies, bankruptcies, etc.) onborrowers. Only gradually and recently has information about the successful handling ofaccounts (prior and current) been contributed to the data repository (1).”Translated this means that other countries mostly report only negative activity which restricts the availability of credit to its population, resulting in slower or non growth economies.
So what are the benefits of issuing credit? After a quarter century of experience within a comprehensive reporting environment the United States has produced an impressive list of benefits. In the report, Lessons from the U.S. experience; “Detailed information about a borrowers past payment history, including accounts handled responsibly, as well as a current profile of the borrowers obligations and available credit lines have proved to be an important tool for assessing risk. The resulting benefits include:
* Dramatic penetration of lending into lower socio-economic groups, making a variety ofconsumer loans available across the income spectrum.* Reduction in loan losses that would have accompanied such market penetration in thepast* Ongoing account monitoring and use of behavioral scoring by creditors to adjust creditlines and take early preventive action if a consumer is showing signals of overextension.Preventive measures include contacting customers to offer budgetary counseling orconcessions on terms to prevent bankruptcy or charge off.* Encourages entry of new competitors, including non-bank financial institutions, whichhas stimulated vigorous price competition and more convenient products* Made feasible the securitization of consumer loan receivables (e.g., mortgages, autoloans, credit cards) which has lowered the cost of providing credit and brought hundredsof billions of additional dollars into consumer lending markets.* Lowered the prices for other financial products as customers have been freed from theirbinding relationships with banks and other depository institutions. In the past thecustomers own bank was frequently the lowest cost source for a loan because othercreditors lacked the information needed to measure risk. Consequently, banks have beenforced to become more competitive for customers at all margins.* Made consumers (and workers) more mobile by reducing the cost of severingestablished relationships and seeking better opportunities (29, 30).”So what does all of this mean? Lets look at some numbers from 1956 to 2003 and get a better perspective. At the end of 1998, mortgage credit owed by consumers totaled about $4.1 trillion, including both first and second mortgages and the increasingly popular home equity lines of credit. Non-mortgage consumer credit (including credit cards, auto loans and other personal installment loans) totaled an additional $1.33 trillion. At the end of 2003, total consumer credit totaled about $9.3 trillion, including mortgage credit and non-mortgage consumer credit.
Whether or not these sums are large given the size of the population, perhaps the more impressive numbers relate to the growth in the proportion of the population using credit. For nearly the past 40 years, federal policy in the U.S. has encouraged the credit industry to make credit and other financial services available to a broader segment of the U.S. population. The result of these public policies has been a dramatic increase in credit availability to all segments of the U.S. population, particularly to those