The basics of credit
- What is credit?
The ability to borrow money in return for a promise of future payment
- What are the forms of credit?
Credit cards and loans
- What costs are associated with credit?
House, car, and school
- What determines if someone gets credit and how much they get?
To get credit, you must demonstrate your creditworthiness
• Savings, investments,
• Use capital to pay loan if
• Financial ability to repay
• High enough income
• Major expenses & debt
• Sense of financial
• Steady job
• Residence (long term)
Credit Cards: What you need to know
- What is a credit card?
A small plastic card issued by a bank, business, etc., allowing the holder to purchase goods or services on credit
- Where can you use credit cards?
You can use it anywhere that accepts it
- What are the benefits and costs of using credit cards?
You don't have to pay until the end of the month...but you can end up with debt if you don't have the money at the end of the month