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I want to continue explaining the advantages and disadvantag

I want to continue explaining the advantages and disadvantages of consumer credit and to make sure to explain what leverage is and why it is important.

I have to explain the advantages and disadvantages of consumer credit. I also have to make sure you explain what leverage is and why it is important.

So far, I am starting with the definition of consumer credit as: "the credit purchase for personal needs (not included is the home mortgage)". My second definition I want to include ia that of leverages as: "the use of borrowed funds to increase your purchasing power". What would I include next to emphasize this to my friend who understands nothing about personal finances and budgeting?

Solution Preview

'Credit', 'loans' or 'finance' are words used to describe money that has been borrowed from someone else and must be paid back. Credit can be good in the sense that it allows us to buy things now, rather than saving up first. Many people find they need to borrow money during their lives for one reason or another, for example to cover an unforeseen expense, or to buy a car or house.

Credit is provided by a range of different financial institutions, such as banks, credit
unions, mortgage lenders and brokers and finance companies. There are many forms
of credit such as:
· credit cards
· store cards
· overdrafts
· student loans
· personal loans, to buy a new car for example
· home ...

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