By: Raul Miranda

Basics of Credit

Credit can be good or bad for some people. Credit helps you buy items you can't really afford, and you get more of an amount to spend if you are on time with all your bills, and payments. If you don't have good credit you can be denied a loan, or even turned away from renting a house or apartment. Whatever you spend with a credit card, you must pay back and the balance carries over to the next month.

Basics of Credit

● What is credit? Credit is when you receive an amount of money based on your creditworthiness
● What are the forms of credit? The forms of credit are credit cards; a card used to buy items, but you must pay the money back, based on your credit you can get more money & car loans; you get a personal loan to buy a car, but you also have to pay the money back
● What costs are associated with credit? The cost with the credit is based on what you spend. The APR is the interest if you decide to have your bill carried onto the next month
● What determines if someone gets credit and how much they get? Your lender decides whether you get credit. The lender looks at your credit score, and get a credit report depending on what you paid on time. The Credit Bureau is what helps come up with your credit card.

Knowledge of Credit

Using credit cards may seem like a good idea when you want something you can’t afford, but it really isn’t that great of an idea. If you use your credit card a lot and never pay back bills, then you will have a lower credit score. Your credit score can be really good and help you out when you want to buy a house, a car, or take out a personal loan. If you pay back your bills all on time, you can get more money for a personal loan, and you are able to buy better things, but only if you pay them back on time.

Credit Cards-What You Need to Know

Credit is based on bills you have paid back on time. You get a credit card based on your credit score. The money from a credit card isn’t free, you still have to pay it back. The interest rates are a waste of money, and to prevent them, you should pay your bill on time. If you don’t pay you probably will go into debt.

Credit Card Vocabulary to Know

● What is a credit card? A credit card is what you can use as a loan to buy something but you must pay it back. The APR are interest rates based on how much money you still owe. Most of them have a credit limit so you know when you have to stop using it, once it is maxed out you can’t use it and must pay the money back. If you fail to pay the money back you get penalty fees and annual fees. If you go over the amount of money you have, you get an over-the-limit fee
● Where can you use credit cards? You can use credit cards wherever you want, but you must remember to pay the money back.
● What are the benefits and costs of using credit cards? The benefits of having a credit card, is that you can use it when you don’t have enough money, and you can get cashback, points, airline miles

Be a Smart Consumer

When using a credit card don’t think that it is free money you never have to pay back. When you use a credit card, you have to pay the amount you spent PLUS interest. You waste more money on stuff you may not need. Only use a credit card when it is necessary. Your credit score follows you around everywhere. If you have a bad credit score, you can be turned down a to buy a house, you can be turned down to buy a car, or get a loan from the bank. Always remember to pay your credit card bills, and other bills on time. You will be much happier in the future, when you can get all the stuff you’ve wanted.