Considerations Before Asking For Credit

Definition

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

Competences

Mastering the role of Considerations Before Asking For Credit in financial literacy context requires the following competences:

Code	Competency Description	Competency Type
271	Understands the implications of a credit commitment on future disposable income	Knowledge
272	Understands the importance of assessing ability to repay before borrowing money	Knowledge
273	Understands the impact of compound interest on credit	Knowledge
274	Understands the importance of knowing how long the repayment period will be and whether it is fixed	Knowledge
275	Understands that the total cost credit may be higher than what implied only by the interest rate	Knowledge
276	Can differentiate between the use of credit to generate or increase future income or wealth and the use of credit for consumption	Knowledge
277	Uses credit only when necessary and after considering the consequences	Skill
278	Assesses the total cost of credit and the likelihood of being able to pay it back before making any decision to borrow money	Skill
279	Makes decisions to borrow and manages any credit commitments within a budget	Skill
280	Takes into account the cost of credit as well as the cost of the item when making a decision to buy an item on credit	Skill
281	Takes into account the potential to generate or increase future income or wealth when deciding whether to borrow	Skill
282	Motivated to consider the consequences of accessing credit before making a decision	Attitude
283	Motivated to seek alternatives to borrowing (such as saving, leasing, joint ownership, social support etc.)	Attitude