The Road to Successful Credit
The Beginning Basics of Starting Your Credit
What are the possible forms of credit?
Credit cards are the most common type of credit. Credit cards allow repeated transactions up to a maximum credit limit, unlike loans. Each time you buy something you are borrowing money that you will have to pay back. If you make the decision to pay the payment back over time, the credit company will charge interest to your account.
What costs are associated with credit?
What determines if someone gets credit and how much they will get?
What is a credit card?
Where can you use credit cards?
Benefits and costs of using credit
Costs: If you are using an higher end credit card in which is for an increased amount of money, you will have an annual fee. This is a required annual money amount you must pay. There are also quite a few penalty fees to be aware of. If you do not pay the entire balance by the due date you will be charged interest. This can range from 0% to 29%.There are also over-the-limit fees in which you will be charged if you go over the limit of the ammount of money on the card.
Smart Consumers: Don’t Fall Into the Credit Card Trap
1. Do not let the phrase "buy now,pay later" get the best of you. Making purchases without paying the amount yet may seem like a dream in the moment, but realize you WILL have to pay that money back. These are not free items.
2. Do not go over the limit you have on your credit card. This will result in fees.
3. Keep track of the purchases you are making with the credit card. This will allow you to make sure you can pay everything back, and that you are not going over the limit.
4. Pay the amount you owe to the bank ON TIME. Do not go past the due date, this will result in being charged a fee.
5. Refrain from owning too many credit cards. The average person owns four credit cards. This can increase the chances of falling into debt.