CREDIT, HERO OR VILLIAN?

By: Tony Cordero

Knowing Credit

What is Credit? Credit is the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.

Credit Comes in many different ways, you can earn credit by Credit Cards, School loans, Car loans, House loans.

Some Credit card companies offer differnet benefits, such as mileage on your airplane flights, cash back on your spending, discounts from particular stores or companies, and special insurances like life and travel. The biggest Cost of a credit card is blowing your budget, if your go over your limit you need to pay it off as soon as possible if you wait the cost will climb higher and higher. Another Cost is the interest rates, interest rates are a rental charge for the assets use, when the buyer is a low risk party they will be charged a low interest rate, if the buyer is a high risk they will be charged a high interest rate.

Credit Scores Are based on your on time payment history and your lender requirements ,the amount of credit used to your total of credit lines, and the amount of time the accounts have been opened. The higher your credit score is the more secure your chance of getting a higher personal loan is.

WORDS YOU SHOULD KNOW

CREDITWORTHINESS- Having a satifcatory credit rating, usually based on credit history, credit rating , and character of the entity

LENDER- An organization or person that lends out money.

INTEREST RATE(APR)- The annual rate that is charged for borrowing expressed as a single percentage number.

So You Want A Credit Card?

A credit card is a small plastic card issued by a bank, business. allowing the owner to purchase good by credit. The Lender of the credit card will have a Credit limit to the amount of money you can spend. Interest rate is also involved in these cards as the money you spend you have to pay back at a certain rate with interest involved.

If a credit card was provided to you by a business that credit card is made specifically for that company and wouldnt be able to be used any were else. If a credit card was provided to you by your bank that card can be used any were as long as you continue to pay your monthly fees you will have complete access to you use this card without putting yourself in debt and having to pay an over the limit fee. The benefit of using a credit card is use the have advantage to use the card wereever you go and dont have to go through the trouble of going to an ATM to take out cash. Another benefit is if you continue to make your monthly payments you will avoid penalty fees and eventually your interest rate will decrease. The cost of using a credit card is some companies may have an annual fee that you are require to pay in order to use their credit card. Another cost is if you continue to miss payments this can ultimately ruin your credit score and put you in great debt. Owning a Credit Card comes with a lot of Responsibilites it can be a great advantage if you play it right, one slip and credit can out you through a lifetime of stress.

Dont Fall Into The Credit Card Trap

If your planning on getting a credit card do your research on the business your signing up for, look for interest rates, anuual fees, late fees, benefits, penalty fees. Look for the things that can make or break you some companies can really be a shark right off the bat if your not smart and careful about your decision. When you do you purchase your credit card make sure you know your credit limit and spend what needs to be spend and dont go over your limit. Another thing is dont miss a payment cause that will put you in a deep hole, and eventaully ruin your credit score. Every month pay your bill and you will see your credit score build and your interest rate lower. Eventually when you decided to purchase another credit card, purchase a house, car , or go to a lender for a loan. They will check your credit report and it will be outstanding if you kept up with all your payments and you will see yourself getting more of a bargain then what you wouldve had with bad credit. If your purchasing a credit card make sure your financially responsible because it can make or break you, dont fall into the credit card trap.