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There are two major types of credit—using credit cards and borrowing directly from a financial institution. Although they differ in their services, they all charge interest on the funds they lend. In this section, you’ll learn about financial institutions, charge accounts, and credit cards—and why you should be aware of the high interest rates they sometimes charge.

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Americans use credit to make many purchases . The total amount of funds borrowed and lent each year is enormous. In addition to individuals borrowing funds, the federal, state, and local governments all borrow funds, too. The nation’s economy, in fact, depends on individuals and groups being able to buy and borrow on credit.

In this section, you’ll learn what credit is and why people use it.

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As with every decision in life, when you decide to buy a car, you are going to make a trade-off that involves an opportunity cost. You will have to decide what type of vehicle to buy, whether to buy new or used, and whether gas efficiency or engine size is more important to you, for example. In this section, you will learn about some of the important things to consider when shopping for a car.

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If you have a part-time job, you may already be saving some of your income for a future use, such as buying the latest gaming system or continuing your education. Don’t be discouraged if you can save only a small amount, as saving something is better than saving nothing.

IAs you read this section, you’ll learn why saving is important to you and the economy as a whole.

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People keep their savings in banks and savings and loan associations because they want a safe rate of interest. If people are willing to take a chance on earning a higher rate of return, however, they can invest their savings in other ways.

Stocks and bonds offer investors greater returns, but, at least for stocks, with more risk. As you read this section, you’ll learn hat stocks and bonds are, and why they carry a risk.