Credit Newsletter

Dulce Lopez 7/8

The Basics of Credit

  • What is credit?
Credit is the ability to borrow money and promise to pay it back in the future.
  • What are the forms of credit?
The forms of credit are loans and credit cards.
  • What costs are associated with credit?
The cost that is associated with credit is the interest when borrowing money.
  • What determines if someone gets credit and how much they get?
To determine if someone gets credit score depends on creditworthiness. By that i mean whether they can pay the lender for the personal loan or not. The lender will first verify with the credit bureau, so they could check your credit report. The decision whether you qualify or not will be based on: character, capacity and capital. There will also be an interest added to the amount you borrowed.

Vocabulary Watch

  1. Credit Card: Its a plastic card given by your bank for the purchase of goods or services on credit.
  2. Credit limits: Its the max amount you can spend using your credit card.
  3. Over- the- limit fee: Its when the borrower is charged for exceeding the loan amount limit.

Credit Cards: What You Need to Know

  • What is a credit card?
A credit card is like a common card where you use it for purchasing.
  • Where can you use credit cards?
Many places accept credit cards, now a days. You can use credit cards them like in stores, ATM machines, etc.
  • What are the benefits and costs of using credit cards?
The benefits of using a credit card is that you can purchase goods, but the costs could be annual fees, interest rate, and penalty fees.

Smart Consumers: Don't fall Into the Credit Card Trap

Having a credit card can come out really handy for anything especially for emergencies. But you have to be really careful the way you use it. You should avoid having too many credit cards, having miss payments, and always read what you sign. Explore all the options there are, so you can pick the adequated account for you. Be aware of the annual fees, interest rate, and the credit limits. A common mistake is going over-the- limit, that later you can't pay and the interest amount makes it even harder to pay it. Just remember that a credit card comes with a lot of responsibility and that there are positive as well as negative consequences.