Credit Newsletter

Learn the basic

Section 1 : The Basics of Credit

  • Credit is pretty much a way of buying goods and services and then paying the bank or person later.
  • There are different types of credit: Installment Credit, Revolving Credit, And open Credit
  • Installment Credit - is when you borrow money and then repay in equal amounts over a specific period of time.
  • Revolving Credit - is basically borrowing money as long as your in good standing and then pay them back in full or make a partial payment with interest.
  • Open Credit - is all the money that you borrowed be paid in full every month.
  • The costs that are associated with credit would be: Interests, Fees, and Annual Percentage rate.
  • Maintaining a stable account with no late payments, no debt, and the state of the credit account will determine if you get a credit card or not.
  • As for how many credit they get goes the same way.
  • Credit - Credit is a way of buying goods and services and then paying the bank or person later.
  • Credit score - is a number determining if the person is creditworthiness.
  • Credit Bureau - company collecting peoples credit ratings and then giving them to credit card companies.
  • Credit Report - A persons past borrowing and repaying.
  • Creditworthiness - the persons credit history is very good.
  • Interest - Percentage of money.
  • Annual Percentage Rate - is the interest rate for the whole year.
  • Lender - is a person that lends money to people with good credit.
  • Credit Cards - A plastic card used for buying goods and services.
  • Personal Loans - is the use of money at your favor and establishes consumer credit.

Section 2: Vocabulary Watch

  • Credit Score is an important vocabulary word because this will determine whether you are creditworthiness meaning if you are acceptable for a loan. A lot of people need to watch out on what they are doing because there is a lot of them that just blow it and they cannot get any loans from any bank because of their credit scores.
  • Overdraft/Overdrawing : This is an important vocabulary word because overdraft/overdrawing is when you take out more money than what you have. So if a person ever take out more money than what they already have they are going to get charged a lot by their bank.
  • Collateral can be an important word in many cases because if you have a little of money and want to buy something expensive then the person can use collateral. Using this means that they will have to give them something expensive like a deed to a house and the person wont get that back until they finish paying off what they wanted to get in the first place.

Section 3: Credit Cards: What you need to know

  • A credit card is pretty much a plastic card received by the bank and used to buy goods and services.
  • You can use your credit card anywhere that has a swiper.

Benefits of using a Credit Card

  • Not going to the bank to get money
  • Counting out change
  • No writing checks
  • Paying your bills on time
  • Getting a good credit means lenders would lend you money
  • Credit cards = Protection of your money

Costs of using a Credit Card

  • Paying more than expected
  1. Example: buying a 56 inch plasma TV for $2500 for only $50 a month on a credit card. People will end up paying for interest so they will be paying more than the original cost of the television.
  • You can fall in debt easily
  • The low monthly payment offers will usually cost you a lot more money.

  • Annual Fees - A yearly fee cause by the usage of a credit card.
  • Credit Limit - Maximum amount of credit that a person can have.
  • Interest Rate - Percentage in a sum of money.
  • Penalty Fees - Fees charged for the violation of your cardholder agreement.
  • Over-the-limit Fee - Getting fee every month and not paying them at all.

Section 4: Smart Consumers: Don't Fall Into the Credit Card Trap

Some tips I would give to someone with a credit card would be:

  • Pay your credit card payments on time
  • Use the Credit card wisely
  • Don't fall into debt