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Black Coffee and Black Cards (A)
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Reference: DARDEN-F-1882-E
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Number of pages: 10
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Publication Date: Aug 5, 2019
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Source: Darden University of Virginia (USA)
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Type of Document: Case
Description
This case follows the recently married Shane and Erin as they explore the world of credit cards. Shane, a musician with an irregular salary and a spotty job history, was raised to avoid credit by his parents who had emigrated from a communist Eastern Europe. Erin, a marketing manager in a baby-formula company, has a steady salary but knows little about credit cards. Shane offers to do some research and report back in a week. This case reveals the complexity of the credit card business and the risks and rewards to a consumer that uses a financial product. In particular, users should recognize that the risk of having a credit card is how it might influence their consumption behavior. Credit cards offer a variety of conveniences, but they are an expensive form of short-term debt that can become an onerous burden if used beyond the means of the cardholder. Thus prudent use of credit cards is a key learning objective of both the A and B cases.