Stock Market Analysis and Personal Finance Mr. Bernstein Sources of Consumer Credit, pp 154-161 March 12, 2013

Stock Market Analysis and Personal Finance

Mr. Bernstein

Sources of Consumer Credit, pp 154-161

March 12, 2013

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Stock Market Analysis & Personal Finance Mr. Bernstein

Sources of Consumer CreditCommercial BanksConsumer Finance CompaniesCredit UnionsSavings and Loans (“Thrifts”)Life Insurance Companies

http://www.google.com/url?sa=i&rct=j&q=stock+market&source=images&cd=&cad=rja&docid=6O4Ds6nITggNnM&tbnid=vjf1xeHBmOQz1M:&ved=0CAUQjRw&url=http://www.123rf.com/photo_9815646_stock-market-trend-under-magnifier-glass-finance-concept-illustration.html&ei=-eYXUYXVHY_Q9ASzoYHgAw&bvm=bv.42080656,d.eWU&psig=AFQjCNGioTmS4ki1lpOGgdTkfMAt9dmbFQ&ust=1360606920614821

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Sources of Consumer CreditCommercial Banks

Personal LoansAuto Loans or other Collaterialized LoansCredit Cards

Consumer Finance CompaniesCredit UnionsSavings and Loans (“Thrifts”)Life Insurance Companies


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Sources of Consumer CreditCommercial BanksConsumer Finance Companies

Little Credit History NeededWill Loan up to 100% of purchase valueQuick ApprovalOften Expensive

Credit UnionsSavings and Loans (“Thrifts”)Life Insurance Companies


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Sources of Consumer CreditCommercial BanksConsumer Finance CompaniesCredit Unions

Members OnlyPayroll Deduction Plans possibleNon-profit

Savings and Loans (“Thrifts”)Life Insurance Companies


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Sources of Consumer CreditCommercial BanksConsumer Finance CompaniesCredit UnionsSavings and Loans (“Thrifts”)Home ImprovementSecond Mortgage Loans (Home Equity Loans)At one time were considered local Real Estate expertsLife Insurance Companies


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Sources of Consumer CreditCommercial BanksConsumer Finance CompaniesCredit UnionsSavings and Loans (“Thrifts”)Life Insurance Companies

Borrow against cash value of policyBalance outstanding deducted from death

benefits


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Credit Cards“Collateralized Credit Card” builds credit ratingWatch the “gotchas”:

Grace period for late payment without finance feeAnnual fee can be $50-$500Transaction feesKnow how payments can be made without delaysHigh interest rates are common…so…

Plan to pay your credit card balance every month


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Types of Personal Banking Financial ServicesChecking AccountsSavings AccountsCDsDebit CardsCredit CardsDirect DepositOverdraft ProtectionBill PayingATMs


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Other Financial Services offered by Banks*Personal and Auto LoansHome Mortgages and Home Equity Loans*Investment and Retirement Products*Home, Life and Auto Insurance*

*These products and services are typically offered by another division of the bank or even an outside partner. Your local

branch office is essentially acting as a sales conduit, making a helpful introduction to another entity.


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Why do banksoffer otherServices?


http://www.google.com/url?sa=i&rct=j&q=traditional+role+of+banks+graphic&source=images&cd=&cad=rja&docid=czJ_CdZQDMDXqM&tbnid=KkJ7PhtzMYJ6jM:&ved=0CAUQjRw&url=http://www.americanbanker.com/issues/177_108/kpmg-survey-finds-banks-rethinking-operating-models-1049900-1.html&ei=5pY4UaqtDY7C9gTlwIA4&bvm=bv.43287494,d.eWU&psig=AFQjCNEOYAy3VCJfe6Ru2lMW4WPTTrTZKA&ust=1362749515429422

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CD rates,1965-present


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CD rates,1965-present


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Fed FundsRate1952-present


http://www.google.com/url?sa=i&rct=j&q=fed+funds+rate+history+graph&source=images&cd=&cad=rja&docid=YZZSJi0BzGnT2M&tbnid=CM8QNPNvsLlaLM:&ved=0CAUQjRw&url=http://20somethingfinance.com/prime-rate/&ei=f5Q4UcWiDpPU8wSDqIDoAg&bvm=bv.43287494,d.eWU&psig=AFQjCNFFx7VJcn9eSJD1SlBEA4IaqyKVMw&ust=1362748891988394

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Interest Rates for SaversWhy are rates currently so low?Is it reasonable to assume rates likely to remain low throughout your lifetime?What is the relationship between inflation and interest rates?


Documents

Stock Market Analysis and Personal Finance Mr. Bernstein Sources of Consumer Credit, pp 154-161 March 12, 2013