Basics of Credit

What is credit?
  • Credit the ability to borrow money in return for a promise of future payment.
What are the forms of credit?
  • The form of credit are student loans, morgans, home loans, car loans, personal loans, credit cards, etc.
What determines if someone gets credit and how much they get?
  • The four c’s is what determines if someone gets credit. The four c’s are character, if you are trustworthy. Capacity, if you have enough money to pay them back. Creditworthiness, what’s your history and collateral, if you you can’t back back the money what do you have of value.

Vocabulary Watch

● Credit Bureau
- company that collects information about consumers credit history and sells to loaner

● Interest (APR)

- yearly cost for the money you borrowed

● Credit Score
-numeric calculation of what is in your credit report; the higher the best.

Credit Cards

Basics of Credit Cards

What is a credit card?
  • A credit card is a card issued by the bank, business, etc., for the purchase of goods or services on credit.
Where can you use credit cards?
  • You can use credit cards basically anywhere
What are the benefits and cost of using credit cards?
  • The benefits of using credit cards are quickly available for emergencies, rewards, cashback & more.
  • The cost of using credits cards are interest rates, penalty fees, annual fees and if you pass over the credit limit which is called over-the-limit fee.
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Smart Consumers

Some Helpful Tips

  • sign credit cards
  • don’t share account information
  • secure browser
  • careful on wireless
  • pay more than the minimum balance
  • only use for necessities
  • keep track of what your charge
  • always pay on time