Choosing Credit

Definition

Choosing Credit. In the context of the Financial Competence Framework, Choosing Credit is a topic in the Planning And Managing Finances subject matter domain.

Competences

Mastering the role of Choosing Credit in financial literacy context requires the following competences:

Code	Competency Description	Competency Type
289	Knows or can easily research the different types of credit available (including credit cards, mortgage products, rotating credit facilities or short-term credit), their intended use and the main advantages and disadvantages of each	Knowledge
290	Knows whether or not a loan is secured against an asset, and can assess the benefits and disadvantages of using such a loan including the implications of failing to repay the secured credit	Knowledge
291	Knows why it is important to be aware of the current interest rate on credit and whether that rate is fixed or variable, as well as the rate of inflation	Knowledge
292	Aware that credit can also be accessible online (e.g. through peer-to-peer lending platforms) and is able to distinguish the different features (and risks)	Knowledge
293	Aware that different types of mortgages exist, including green mortgages	Knowledge
294	Chooses credit products carefully [once the decision has been made to borrow, and once the appropriate credit product has been selected ], taking into account factors such as the interest rate, inflation rate, overall cost and flexibility as well as the amount to be paid on regular repayments	Skill
295	Uses comparison tools to evaluate the cost and other characteristics of credit products	Skill
296	Confident to ask additional information about different types of credit	Attitude
297	Confident to choose a suitable credit provider and product when necessary, also by using available comparison tools	Attitude