Credit and credit traps

By: Michael Mullen

The basics of credit

What is credit?

Credit is money that the government allows you to use, but you have to pay them back with interest. This also affects your credit score and report.

What are some forms of credit?

Installment loans, student loans, credit cards, home loans, personal loans, low limit, pre-paid, student.

What determines if someone gets credit and how much they get?

A persons credit is based off of their character, capacity, creditworthiness, and collateral.

Some vocab to know

Annual percentage rate: The rate at which you must pay back the money that you use.

Credit score: A score that shows how well your credit is doing. It ranges from 300 to 800, with 800 being the best.

Credit limit: Some cards allow you to have a limit that you cannot go over. This can help those who don't have the best self restraint.

Credit cards: What you need to know

What is a credit card?

A card that allows you to use government money.

Where can you use credit cards?

You can use a credit card at most establishments.

What are the benefits and costs of a credit card?

A credit card allows you to use money when you don't have it, but need it. A credit card has some penalties though. The first is the penalty fees. Another is the over the limit fees. They also have credit limits and interest rates to pay back. There is also sometimes annual fees to even use the card.

Credit card tips

Some tips.

1. Only buy things that you could repay within a month

2. Sign your credit card as soon as you get it

3. Never share credit card info

4. Always use a secure browser if at an internet cafe

5. Never share any passwords

6. Pay more than the minimum when paying back your credit card

7. Don't max out your card

8. Only use the card for the items that you need

9. Keep track of all purchases that you make

10. Always pay back on time