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.

Understanding Credit - What Is Credit?

What are the forms of credit?

Loans, personal loans, Lines of credit, and Credit cards. Its anything that is attached to a bank, or financial institution, in which that bank or institution lends you money, and you pay it off.

What costs and benefits are associated with credit?


  • Can buy without waiting to save.
  • Builds a reputation and credit score
  • Interest on balance that carries over.
  • Increased Purchasing Power


  • 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?

Everyone who has a bank account has credit. To get good credit, you need be creditworthy, meaning you need to be responsible. You need to pay your bills on time, and you need to know what the dues dates are, when fees apply, and everything. All of this information is displayed in a credit report. The report includes every loan, credit card, and everything financial associated with your name. It also displays your credit score, which give you a numeric sense of how good your credit it. The highest is 820, the lowest is 30. The average is 695. If you have any questions about your own Credit score contact a Credit Bureau.

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.

Credit Card Debt Explained With a Glass of Water

Where can you use credit cards?

Everywhere. Whether you are in-store or online, credit cards are used universally. There are some vendors who wont let you pay, for example, a coat check, or a hot dog stand, but now, even they sometimes let you pay with a credit card.

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


  • 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

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Smart Consumers: Don’t Fall Into the Credit Card Trap

Credit Cards could be extremely beneficial, if you are extremely attentive to them. They help you gain a reputation as a trustworthy individual; But if not cared for, they will destroy your credibility and trustworthiness. If i were to compare them to something, it would be a psycho attention seeking boyfriend. Just like in that dysfunctional relationship, if you don't pay them (attention) they will come at you, but not at first, they will remember. It so they can collect all the fees and interest, so that by a certain time, they can just rip everything away from you. But moving beyond the metaphor, you always have to remember that you are borrowing money, and that gets tricky for people. Remember, your debit card is is what you own, and your credit card is what you owe. There's a yin and yan. Another tip is that you need to know what you can afford. If you cant afford a new computer, and you know this, your best option is to wait until you have enough money to pay it off. Interest Gets high if you carry a balance, best pay it off during the grace period. If you really need that computer now, and don't have money now, but you know that you will have it in the VERY near future, then sure, get it on credit, but make sure you are on top of your game. Credit card companies want to outplay you out of your money, so be very careful and graceful in the dance of who comes out on top.


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



Notes from class, My sister, and my parents. Also the metaphors, i just made up.