Are you careful with your credit?

Tatyana Cruz and Linda Hernandez and Alex Lopez

The Basics of Credit

  • What is credit?

A contractual agreement in which a borrower receives something of value now and agrees to repay the lenders at some later date.


  • What are the forms of credit?

-loans: let you borrow money that must be repaid with interest. You can obtain a loan for a specific purpose, such as financing a new car, paying college tuition and buying or renovating a home.

A personal loan establishes consumer credit that is granted for personal use.


  • Secured loans are guaranteed by collateral, which is an item of equal or greater value than the amount

  • of the loan, such as a car, home or cash deposit.

  • Unsecured loans do not require collateral and are made based on your credit score and ability to repay.


-Installment loans:are made for a fixed amount at the time of your application and approval. This type of loan is repaid in fixed monthly payments over a specific period of time. The interest charges are included in the payments.


-credit cards: are perhaps the most common type of personal credit. Unlike installment loans, credit cards allow repeated transactions up to a maximum credit limit, also known as your available credit limit. Each time you charge something, you are borrowing the money until you pay it back.


  • What costs are associated with credit?

Credit needs to be attained by paying Credit cards on time, bills, mortgages, and loans. When you keep up with all of the above you will have a good credit score. Credit Reports give you credit history which will help you maintain your credit. the credit bureau keeps track of you credit.


  • What determines if someone gets credit and how much they get?

A person's credit score is extremely important, as it determines his or her eligibility for all kinds of financial endeavors, such as credit cards and home loans. Some people have difficulty adjusting their scores because they are not sure what the number is based on. A specific formula is used to determine the score, and it's based on whether the person pays bills on time, how much debt he or she has, the length of his or her credit history, how many new accounts the person has, and the diversity of the credit accounts. Knowing what criteria go into the number on a credit report can help a person maintain a good score and qualify for higher limits and better rates on loans. creditworthiness determines if you get a better chance of getting credit.


Vocabulary Watch

Smart Consumers: Don't Fall into Credit Card Trap

Ways to stay safe while using Credit Cards:


  1. Get a card that has added security features, like a photo ID.
  2. Draw a line through blank on charge slips above the total to prevent any changes.
  3. Save Receipts
  4. Carry on the cards you need, especially when traveling.
  5. Never lend your card to anyone, and don't leave cards or receipts lying around your room, no matter where you live.


Credit Card: What you need to know

What is a credit card?

-A plastic card issued by a bank, business, etc., for the purchase of goods or services on credit. the bank sets you a CREDIT LIMIT, and gives you an INTEREST RATE on the money you borrowed.

Where can you use credit cards?

-Credit cards are very commonly accepted everywhere. most stores, malls, restaurants.

What are the benefits and costs of using credit cards?
-When having a credit card you get an ANNUAL FEE, If you go over your limit you may have a OVER THE LIMIT FEE which is a PENALTY FEE. Penalty fees are also applied when you don't pay on time or etc.