By Erika Pimentel Period 9

Basic Credit

Credit is the ability to borrow money for a promise of future payment. The forms of credit are loans, credit cards, buying a car. You can get a personal loan for things such as buying a house, paying for school, buying a car, etc. You get that loan from a lender. A lender is a person/organization that lends money. The faster you pay your loan, the better your credit score is. If you want to buy something that involves your credit score, the credit bureau will check if your credit score is good. They make a list of things that you pay and see how long it takes you to pay them back. The costs that are associated with your credit is that you have to pay an interest. APR is a rate that you have to pay annually. What determines what your credit score is your ability to pay something/someone back. That is also known as creditworthiness. Creditworthiness is when they see that your are responsible enough to and trustworthy enough to pay them back. Your credit score can either improve or not. That's why they have a credit report. A credit report is when you have to keep track of the goods and services that are being held on your credit account.

Vocabulary Watch

Inflation: A general increase in prices and fall in the purchasing value of money

Debit Card v. Credit Card: Debit card is when they take out money right away.

Wire Transfer: A method of transferring money from one person or institution to another. It can also be from one account to another

What You Need To Know

You should only use a credit card during emergencies. You don’t want to spend it like water because you don’t want to be in debt. You have to pay back. The faster you pay, the better your credit score will be. You should start when you are 18. You should choose wisely. Choose the card that has good benefits, but not that expensive.

What is a credit card? It helps establish a credit score. The bank give you this card where you can purchase things, but you have to pay them back.

Where can you use credit cards? Basically anywhere

What are the benefits and costs of using credit cards? Cost: There is an annual amount that you have to pay between 15-100$. There is an interest (APR) 0-29% pay the entire amount by the due date. There is a limit on each credit card and an extra 30$ for each charge made beyond the limit of the card.

Smart Consumers: Don't Fall Into The Credit Card Trap

You should stay safe using a credit card because it affects your future. You won’t be able to buy things like cars or a house in the future. The credit card companies can manipulate you. You need a credit card so that you could get credit score, but you also need to be careful. Just use it for emergencies or maybe once every two months. You don't want to owe all that money later on, or pay a fine because you went overboard. Pace yourself and be smart.