Credit- What is it?
A guide for people too lazy to research
The Basics
What is credit?
The ability for a customer to get a product or service before payment through a lender.
What are the forms of credit?
What costs and benefits are associated with credit?
Pros:
- Can buy without waiting to save.
- Builds a reputation and credit score
- Interest on balance that carries over.
- Increased Purchasing Power
Cons:
- Overusing it
- Late fees
- Interest
- Difficulty getting loans and such in the future.
- Can get out of hand pretty easily.
What determines if someone gets credit and how much they get?
Credit Cards: What You Need To Know
What is a Credit Card?
A credit card allows you to borrow money from your bank to make your purchases. You need to pay back the bank within the ¨grace period¨ usually 21-26 days. If you don't the bank will put interest on it, and you have to pay a higher price. If you hear the phrase: ¨I maxed out my card¨ that means that the person has hit their credit limit, and now must pay a fee.
Where can you use credit cards?
What are the benefits and costs of using credit cards?
- Able to buy needed items now
- Don't have to carry cash
- Creates a record of purchases
- More convenient than writing checks
- Consolidates bills into one payment
- Rewards and Incentives offers
Cons:
- Interest rates(higher cost of items)
- There are a lot of fees with it though, Annual fees, penalty fees, over-the-limit fees, foreign transaction fees.etc.
- Financial difficulties may arise if one lose track of how much has been spent each month
- Increased impulse buying may occur
Shopping for Credit
Smart Consumers: Don’t Fall Into the Credit Card Trap
Sources
What is credit?
What are the forms of credit?
The Youtube Video & Notes from class
What determines credit (...)?
Notes from class
What is a credit card?
The Youtube video below it & Forbes article
Where can I use it?
Benefits and cons of credit:
Notes in class and Forbes
Shopping for credit:
DiscoverIt Chrome for Students
Amazon Rewards Visa Card
Advice:
Notes from class, My sister, and my parents. Also the metaphors, i just made up.