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Basics Of Credit

Credit is the ability to obtain goods and services before payment, based on the trust that payment will be made in the future. There are 3 types of credit, Installment,revolving and open Installment credit is what you use to borrow money and you repay in equal amounts over a certain amount of time. Revolving credit allows you to borrow money as long as your credit score is good and you are able to pay it back in full or partially with interest/ fees. Lastly, open credit is the amount of money you borrow per month that has to be repaid in full by the end of the month. Credit comes with fees and the purchase of the goods your buying you also might have to pay APR, or an annual percentage rate. A persons credit depends on their creditworthiness. It also depends on if the persons pays their bills on time, if they have debt, and how long their credit history is.


Credit-The ability to obtain goods and services before payment, based on the trust that payment will be made in the future.
Credit Score-
A number based on how a persons credit is, can range between
Credit Bureau- A company that makes the credit scores available to credit companies.
Credit Report- A record of an individuals past credit history including payments and other information.
Creditworthiness- Trustworthiness with money based on a persons credit history.
Interest (APR)- Annual percentage rate on loans or credit.
Lender- Someone who lends money.
Credit Cards- A small plastic card issued by banks allowing people to purchase goods or services.
Personal Loans- A loan that is granted for personal use, can depend on the persons ability to pay the loan back.

Credit Cards

What You Need To Know

A credit card is a small plastic card that is issued by a bank allowing you to purchase goods or services, most credit card have a credit limit. You may have to pay an annual fee to use your credit card. You can use your credit card to make purchases for things you need. Benefits of using your credit card can be bonuses, cash back and safety. If you go over the limit on your credit card you may have to pay a over-the-limit fee. Credit cards are more convenient because the money stays in your account for a couple of weeks, then is taken out while a debit card the money is gone instantly.


Annual Fee- A yearly fee changed to have privilege of a credit card.

Credit Limit- The maximum amount a credit card company will allow the cardholder to obtain.

Interest Rate- The money you have in the account is charged by a percentage.

Penalty Fees- Fees charged if you violate the terms of your cardholders agreement.

Over-the-limit fee- Fees that are charged when you exceed your credit limit.

Smart Consumers

Safety Tips On Using Credit Cards

First of all, you should know the responsibilities of using a credit card. Do not think that it is free money, if you keep using it without paying it back you can fall in to debt. Make sure to choose a credit card with good benefits and low APR for lower interest. Try not to have to many credit cards, and make sure to keep track of what your spending. Also, always try to pay on time to avoid late fees.