Question

Explain the three ways of buying goods on credit.

Answer 1

1. Hire purchase/ installment credit - a form of installment credit whereby goods are obtained by paying a certain percentage in form of deposit. The balance is paid later through equal installments spread over a period of time.
2. Non installment credit - this is where one obtains goods and services for a period of time and then pays up when bills arrive
3. Use of credit cards - this is where a consumer uses a card to buy goods and services. The payment is paid from the consumer's bank account.