By: Maria Tlazola

Section 1: The Basics of Credit

What is credit?

Credit is like having points and those points give you trust from businesses. You can get credit from a bank/ loaner. I you have a good credit score, that is given to you by a Credit Bureau. Then, you are able to receive goods now and pay them off later as time goes by. It is important to maintain your credit report in a good condition because this determines whether you are eligible for a personal loan or a credit card. The lender can easily reject you if you have a history of bad credit.

What are the forms of credit?

There are different types of credit. One type is called, Installment Credit. This type of credit is when you borrow money and repay equal amounts over a specific period of time. Another type of credit is called revolving credit. This type of credit lets you borrow a certain amount of money as long as your account is in good standing. To pay back the borrowed amount you make the payment in full or make a partial payment that may result in an interest fee.

What costs are associated with credit?

There are often annual fees, application fees or late fees that apply to many credit cards. There are some no annual fee credit cards. It is important to always read the terms & conditions and all fine print thoroughly so that you fully understand all costs that go with your credit card.

What determines if someone gets credit and how much they get?

There is a specific formula that is used to determine the credit. This is based on whether the person pays bills on time, how much debt he or she has, the length of his or her credit history, how many new accounts the person has, and the differences of the credit accounts.

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Section 2: Vocabulary Watch

Credit History-Keeps track of your payments and is very important. You really do not want to mess it up.

Credit Limit-A credit limit is the maximum amount of credit that a financial institution or other lender will extend to you.

Collateral- Something pledged as security for repayment of a loan.

Credit Rating (Score)- It is like a grade that is given to you based on your credit

Capacity-The maximum amount that something can contain

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Section 3: Credit Cards- What You Need to Know

What is a credit card?

A credit card is a plastic card that is issued by a bank or business, so that you can purchase goods or services on credit. It is important to know about the fees that the credit card may include. Some examples of the fees that the credit card may contain are annual fees, penalty fees, and over the limit fees and APR.

Where can you use credit cards?

You can use your credit card anywhere where they accept it. You just have to be aware to stay within your credit limit. You also have to make sure that if you use it online you use it in a trusted site. You can also use a credit card to withdraw money from your account.

What are the benefits and costs of using credit cards?

Some benefits of using credit cards is are that you have easy access to large sums of money at any time. You can also build up your credit when you use your card and pay it off on time.

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

When you obtain a credit card you have to make sure that you do not expose yourself. You will get a pin number to your account along with your credit card. You have to make sure that you keep that a secret and shield it whenever you need to key it in. If you need to give personal information through the phone make sure you are talking to the right person and that others are not listening. You also have to make sure that you do not throw away any papers that contain any personal information. You should always shred any type of document that may contain easy access to your identity. You should also not be using your credit card on mistrusted websites. Make sure that you check your bank statement and report anything that you may seem suspicious.
Credit Made Clearer - Staying Safe