Assignment - Credit Scenarios

Remember the 8 steps that will help you make good financial decisions:

  1. Put yourself in a calm state. Decisions made from fear or worry are rarely sound. ...
  2. Gather all your information. ...
  3. Clearly state your goals. ...
  4. Research your options. ...
  5. Weigh the potential outcomes. ...
  6. Sleep on it. ...
  7. Make a decision and act on it! ...
  8. Evaluate your results.

Using information gained from this unit, respond to the following scenarios.

Scenario 1

You want to purchase a new vehicle and you have your heart set on a brand new SUV. You take out a loan to pay for the car, but after six months you begin to fall behind on payment and incur late fees.

How would you use the decision making steps in this scenario?

Does your credit score go up or down?

Why does it go up or down?

If your score goes down, how can you fix it?

Scenario 2

Mark and Ryan just moved into their first apartment together and they want to buy a flat screen TV for the living room. They both work but between college tuition, books and rent their funds are running low. Mark decides to take advantage of a financing offer from a local electronics store and buys the TV on a line of credit.

How would Mark and Ryan use the decision making steps in this scenario?

Is this a good or bad debt move? Why?

Scenario 3

Nora has heard that opening a lot of credit card accounts is a good way to build credit. She currently has five cards, but is sometimes forgetful in paying her bills on time and usually has a balance on each card. Her favourite store is offering a $50 coupon on her next purchase, with the promise of more coupons in the future, if she opens a credit card. She decides to open the store credit card to get the discounts.

How would Nora use the decision making steps in this scenario?

Is this a good or bad debt move? Why

Scenario 4

You just got the keys to your first apartment. You also have a new credit card with a $4000 limit and you use it to furnish your new place. Before you know it, you’ve bought a TV, a couch and a dining room table When you get the credit bill, you realize you’ve spend your full credit limit of $4000.

How would you use the decision making steps in this scenario?

Does your credit score go up or down?

Why does it go up or down?

Was this a good decision? Why or why not?

Submission

Use the "Credit Scenarios" link on the main page of this section of the course to upload your assignment to your teacher for marking.

Your assignment will be graded using the following rubric.

Apply Decision Making Process to a Scenario

Applies the decision-making process to scenarios.
4 points

Applies the decision-making process but missed some critical steps.
3 points

Applies the decision-making process but only at a basic level
2 points

Does not apply the decision-making process.
1 point

No decision made.
0 point

Organization & Logical Approach to the Scenario

Provides thoughtful, logical response to the scenarios.
4 points

Satisfactorily completed but lacks logic.
3 points

Response lacks focus or demonstrates confused or conflicting thinking.
2 points

Provides unclear response to scenario or lacks a response.
1 point

Provide no response.
0 point

Quality of Evaluation to Scenario.

Response is highly persuasive and convincing.
4 points

Provides a general response to the scenario.
3 points

Provides unclear response to scenario and is difficult to understand.
2 points

Response is unfocused, illogical or incoherent.
1 point

Quality not shown.
0 point

Grammar, Spelling and Mechanics

Response has not errors in grammar, spelling or mechanics.
4 points

Response has 3 or less errors in grammar, spelling or mechanics.
3 points

Response has 4 or 5 errors in grammar, spelling and mechanics.
2 points

Response has 6 or more errors in grammar, spelling and mechanics.
1 point

Unacceptable.
0 point

Submit your responses to the questions in the online text box or attach a file to the assignment submission link.