The Basics of Credit

Helping your credit out through basic discussion

Credit and its different forms

  1. Credit is The ability to obtain goods or services before payment, based on the trust that payment will be made in the future: "unlimited credit". Credit has three different forms when coming into the banking and financial world their is your Credit score, the credit bureau, and Credit Report.
  2. Companies check your creditworthiness which is basically a persons credit history to see if they are trustworthy for forms of credit. The Credit score is different form of credit in which it is a score that banks and companies judge you for on time payments such as bills, rent, and even credit card payments. If you have a low score you will have a higher APR, and may not even be able to receive any type of credit card do to companies checking to see if your score is high. Then there is the Credit Bureau which are

    companies that collect the credit ratings of individuals and makes them available to credit card companies, financial institutions, etc. Lenders are the people that give you the credit cards and personal loans.
  3. The primary costs associated with credit cards are the discount fee charged by the credit card processing company and the up-front cost of purchasing the equipment, and interest rate.
  4. The thing that determines weather someone gets credit and how much they get all is if your credit score is high and credit report looks good so paying bills, insurance, etc on time.

Section 2

Vocabulary Watch

Credit is added into a lot of words to help define their meaning. Like Creditworthiness in which trustworthiness with money is based on a person's credit history; a general qualification for borrowing. This shows companies and banks if you can get a credit card because you make on time payments, because a credit card itself is a plastic card issued by a bank, business, etc., for the purchase of goods or services on credit. Then again even with credit sometimes you still have to pay a deductible which is a specified amount of money that the insured must pay before an insurance company will pay a claim.

Section 3

Credit cards:what you need to do

Credit Cards are plastic cards issued by banks, businesses, etc., to purchase goods or services on credit to eventually pay back eventually with annual fees. There are credit limits so you can only spend as much as your offered from banks and businesses. Credit cards can be used in stores almost in every store in America, as well at ATM’s, but be careful what you get and do you can get a penalty fee(s). If you go over the amount of credits you use you’ll have to pay a Over-the-limit fee, and this will also increase the amount of your interest rate. Benefit of using a credit card over money is really simple it is safer to use the money, and a higher chance for it not to be stolen, and the cost of using it is having to pay it back later with interest.

Section 4

Smart Consumers: Don’t Fall Into the Credit Card Trap

Their are many ways to stay safe while using credit card and these are some of the steps:

1.Don’t give your account number over the phone unless you’ve initiated the call. If you’ve dialed a wrong number, don’t give it out at all.

2.Get a card that has added security features, like a photo ID. Your mom will be so proud.

3.Never write your account number or PIN on the outside of an envelope or postcard. Grandma doesn’t need to know your PIN.

4.Draw a line through blank spaces on charge slips above the total to prevent any changes. You want to tip well, but not that well.

5.Don’t sign a blank charge slip unless absolutely necessary, and only if it’s in an actual store. Never sign a slip handed to you by Dave from down the hall.

6.Save receipts. Pretend they’re old concert tickets.

7.Always check receipts against your monthly statements. If anything looks fishy, report it within 60 days of the statement’s mailing date. Unless you actually bought fish with your card, in which case, don’t report it.

8.Make a list of card numbers, expiration dates, and the toll-free numbers of your credit card companies. Keep this record in a safe place, separate from where you keep your cards. Use this information if you ever have to report your cards lost or stolen.

9.Carry only the cards you need, especially when traveling. To clarify: you may need 1 or 2 cards. You will not need 6.

10.Never lend your card to anyone, and don’t leave cards or receipts lying around your room, no matter where you live. We know, we know, Omega House is the safest house on campus.