Financial Survival

How not to be an idiot with your money

Some of you already are aware of their finances and own credit cards, have jobs, or have bank accounts. Unfortunately, most of you have no idea what you're doing with your money, and that needs to change. You may have no idea what things like "credit" or "Installment notes" mean, and that's perfectly fine. Everything there is to know about credit is in this flier.

Section 1: The Basics of Credit

To start off, credit is the ability of a customer to obtain goods or services before payment. So pretty much it's buying something without actually having to have the money, and then paying for it later with interest. Credit comes in several forms mainly as loans, installment loans, and credit cards. Loans Secured loans are guaranteed by collateral, which means something of equal or greater value than the amount of the loan, such as a car, home or cash. Installment loans are at a fixed rate and is usually paid by month over a period of time. The most popular form of credit would be the credit card. A user of a credit card can buy items without having the money at the time and then pay it back usually by paying a portion the end of the month until it is repaid. A user has an fixed interest rate usually based on the users credit score, which is a number given by the Credit Bureau that shows how often they pay loans on time and other means of scoring. Say a user didn't pay back loans on a regular basis, their credit score would go down. A user can check their credit score by receiving a credit report from their provider. Credit is extremely beneficial to people but also dangerous for some. If one had an emergency and needed to buy something but didn't have the money at that moment, a credit card or loan would be beneficial to them. This also means that many people go into debt as a result of overspending on their credit cards, and then they owe the lender of the money. If it were a very large purchase, a personal loan may be of use as it would have a lower interest rate than a credit card.

Section 2: Credit Cards: What You Need to Know

Credit cards are the most widely used form of a credit loan out there. They are an electronic card that is scanned at the store which charges money to the users account. Credit cards can also be used online. Using a credit card is not free, though. There is always an interest rate that is paid along with the money owed to the lender. Some cards also have an annual fee for extra beneficial options for the card. Using a credit card also does not mean that a person could charge millions of dollars of merchandise to a card at once, but there is a credit limit which prevents users from going over the max amount. The credit limit is based on a users credit score. If a user was to go over, (most companies warn you before going over) there would exist an Over-the-limit-fee for the user. Credit card companies also implement a penalty fee if the user was to miss a payment on their card.

Section 3: Shopping for Credit

In this section we look at two credit cards side by side to see the benefits and disadvantages of each card.
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As you can see, these two cards are very similar although have several key differences to each other. The chase card has a much longer grace period and many more benefits than the very basic BankOfAmerica card. Even with a $0 annual fee, the benefits may outweigh the lesser, more basic card.

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

Many of the benefits listed by the Chase card may come in very handy to young adults using credit cards for the first time. There is a very real chance that your credit card information may be stolen and you need to know what to do. Many credit card companies offer consumer protection, much like Chase, which will cover consumers if their information is stolen.

Although there is the chance that your information will be stolen no matter what, there are still ways to try and prevent this from happening. One of the main ways is buying from sketchy sources. Never purchase items for a price that seems to good to be true with your credit card. Also online websites many times are scams and lead you on to having an extremely low price for an item, whereas they're actually just trying to get your information.