Basics of credit
1) What is a credit? The ability to borrow money in return for a promise of future payment. "Buy now pay later"
2) What are the forms of credit? The two forms of credit are Personal Loans and Credit cards
3) What costs are associated with credit? Credit is not free
4) What determines if someone gets credit and how much they get? A person must demonstrate your creditworthiness. A person credit Bureau Which provides a persons credit history aka credit report.
2) Creditworthiness- trustworthy with money as based on a person's credit history; a general qualification for borrowing.
3) Credit- The ability to obtain goods or services before payment, based on the trust that payment will be made in the future: "unlimited credit".
Aka " Buy Now... Pay Later"
-Credit cards can be used at stores, restaurants, buying things online
-Some common credit cards: VISA, MasterCard, Discover
Regular charge accounts
- Balance is paid in full
Revolving charge accounts
- Balance can be carried from month to month
Establishing credit now will allow you to easily use credit in the future
- Best if you begin when your 18
Credit card costs
- The annual amount you must pay is $15-$100
- Interests are between 0%- 29% , Pay all balanced by due date= no interest
- Max amount you can spend using card
- Over limit= Fee or declined
- Late fees- making payments late
- Penalty fees- additional fees due to late payment, over credit limit, etc.
- Can result in an increase in interest rate
And always limit yourself to how many credit cards you have.