Buy now.. Pay later!

Get informed on how to build up credit..

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If you are over the age of 18, now is your time to start up credit.

SECTION 1: BASICS OF CREDIT

WHAT IS CREDIT?

Credit is the ability to borrow money in return for a promise of future payment. Credit is not free, you must pay Interest (APR or annual % rate).


THE FORMS OF CREDIT ARE..


  • Personal Loans
  • Installment loans
  • Credit cards


WHAT ARE THE COSTS OF CREDIT?

Credit is not free, you must pay Interest (APR or annual % rate).


WHAT DETERMINES IF SOMEONE GETS CREDIT?

In order to get credit, you must demonstrate the 3 C's of creditworthiness.


  1. Character- Sense of financial responsibility


  2. Capacity- Financial ability to repay loan


  3. Capital-Value of what you owe


The 3 C's determine if you are financially responsible to pay back a loan. The credit bureau, a system in which collects a record of every adults credit, gathers this information to make a credit report. Once the credit score is made, you will be able to see if you meet qualifications.

SECTION 2: VOCABULARY WATCH

Collateral- Something pledged as security for repayment of a loan.


Deductible - A specified amount of money that the insured must pay before an insurance company will pay a claim.


Premium- An amount to be paid for an insurance policy. It is the sum added to an ordinary price or charge.


SECTION 3: WHAT YOU NEED TO KNOW ABOUT A CREDIT CARD

Basics of a credit card..

WHAT IS A CREDIT CARD?

A credit card is issued by the bank for the purchase of goods or services on credit. The common credit cards used are VISA, MasterCard, Discover, and AMEX.


WHERE CAN YOU USE A CREDIT CARD?

Credit cards can be used almost anywhere such as


  • Restaurants
  • Gas Stations
  • Local stores
  • Etc.


With credit cards you can withdraw money from an ATM, and make balance transfers. Interest rates may apply with these transactions.



BENEFITS OF A CREDIT CARD



  • Allows you to use credit for the purchase of more goods
  • Offers incentives: Cash back, points, airline miles



WHAT COSTS ARE ASSOCIATED WITH CREDIT CARDS?


The required annual fee of a credit card is from $15 - $100.

The Interest (APR) rate is from 0% to 29%.


Credit limit is the maximum amount of money you can spend during the use of this card. Penalty fees and over-the-limit fees apply for each charge made beyond limit.


SECTION 4: BE A GOOD CONSUMER, DON'T FALL INTO THE CREDIT CARD TRAP!

Some tips you need to know..


  • Choose your card wisely. The less expensive, the greater the benefit.
  • Avoid minimum payment trap by paying in full amounts.
  • Consider a loan as opposed to using a credit card.
  • Avoid having too many cards so that you don't miss payments.
  • Read what you sign
  • beware of bankruptcy