Tony Avila, Pd 1
The Basics of Credit.
Questions to answer:
● What is credit? Credit is money that is borrowed to a person.
● What are the forms of credit? There are Loan and Credit Cards.
● What costs are associated with credit? Interest, if you don't pay the money back on time the bank will add a fee.
● What determines if someone gets credit and how much they get? If they have a job and if they have a credit score prior to opening a credit card account.
Credit Cards, What you need to know.
● What is a credit card? A credit card is a small plastic card, with an electronic encoding inside of it, that allows people to make purchases on credit, if they don't have any money at that time, with the promise that the consumer is going to pay the money back.
● Where can you use credit cards? Credit Cards can be used wherever electronic payments are allowed. Example: Store, Gas, Mall, and Online Shopping.
● What are the benefits and costs of using credit cards? A benefit associated with using a credit card is the ability to make purchases whenever you don't any money on your person. Also, if you make all your payments on time, your credit score will go up and the better your credit score is, than the more loans you are able to take out.
Smart Consumers: Don't fall into the credit card trap.
In this section, you should discuss ways to stay safe while using credit cards (i.e.
tips you would give someone when using credit cards).
Good Guideline when having a credit card is..
- Only make purchases that are within your budget.
- Make sure that you are able to pay the "loan" back within a month, it's not good when your purchases roll over into the next month. If money from the previous account does roll over than you will be charged a fee, also known as interest.
- Don't go crazy with credit card. Having a credit card is a privilege, if you ruin your credit and go into debt, then you will have a hard time getting a credit card in the future.
- If your credit score is bad, then you won't be able to take out loan. Loans are essential when you need to purchase a house or when you need to purchase a car. These are essential when you are starting a family. It's critical to have good credit.
- Be responsible. Make sure that you always pay your loans.