What you need to know about CREDIT

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The Basics of Credit

Credit is the ability to borrow money in return for a promise of future payment. There are many forms of credit. For examples, you can get a credit card for student loans, house loan and car loan. You will receive this money from a lender and to get credit you must demonstrate your credit worthiness(reliability to pay back a loan.)
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Vocabulary Watch

Interest: It's money you have to pay, on top of what you already borrowed.

Credit Score: Credit Score helps you when you want to borrow money. It helps you because if you have a good score, you get a better interest rate, so then your payments are lower.

Credit Limit: It's the amount that you can only borrow and you can't get over that without getting a penalty.

What you need to know about credit cards

  • A credit card is a plastic card used to purchase services or merchandise on credit, which is used by the bank or businesses. Some credit cards have annual fees, so it's important to read the applications before.
  • Credit cards can be used at any place or establishment that accepts that form of credit.
  • The benefits of using a credit card is the opportunity to build and improve your credit score, so you can approved for loans on cars or houses, etc in the future. Also, cost of credit cards are higher interest rates when not paying the balance on time.
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Don't fall into the Credit Card

  1. Never let anybody take your credit cards
  2. Avoid too many cards
  3. Don't miss any payments or else you have to pay a penalty fee
  4. Read what you sign
  5. Avoid identity theft