Credit Newsletter

Lisette Perez Period 10

Section 1: The Basics of Credit

What is credit?

Credit is the ability to borrow money in return you must pay it back later. This concept is known as buy now pay later.

What are the forms of credit?

The forms of credit are loans and credit cards. Your personal loans like house, car and school are a form of credit.

What costs are associated with credit?

You must pay interest(APR) on credit. Credit is not a free concept.

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

The factors that determine if a person can receive credit are character, capacity, and capital. They are the three factors lenders determine your creditworthiness. Credit bureau assigns each person with a credit score. The higher the number the better. Lenders can request your credit report from the Credit bureau. It provides your credit history and credit score.

Section 2: Vocabulary Watch

Lenders are people or an organization that lends money or credit. Its important to know that when trying to get credit not all lenders will allow you to. Lenders take the time to review you by three factors that contribute to your creditworthiness. Creditworthiness is your ability to pay back a loan. Another factor that plays a role in this is your credit score. Your credit score depends on your creditworthiness. If you're a bad character towards creditworthiness then your score won't help you. Your creditworthiness is what determines your score.

Section 3: Credit Cards: What You Need to Know

What is a credit card?

A credit card is a plastic card issued by a bank, business, etc., for the purchase of goods and services on credit.

Where can you use credit cards?

You can use a credit card when purchasing goods and services. You can use a credit card anywhere but use it wisely. Don't buy things you want, only buy things that you absolutely need.

What are the benefits and costs of using credit cards?

Credit cards have a annual fee that is a amount you must pay. They have a limit known as a credit limit when there is a maximum amount you can spend when using the card. when you pay the entire balance by the due date for a credit card then there is no interest but when you don't there's a interest(APR) between 0%-29%. When you go over the credit limit you get a over-the-limit fee. When you receive a over the limit fee then you get an additional fee which is a penalty fee, it may increase your interest rate.

Section 4: Smart Consumers: Don’t Fall Into the Credit Card Trap

When using a credit card you need to be aware of somethings that can harm your credit score. You should always pay your credit card balance in full to avoid payment trap. Pay on time and don't go over the limit to avoid fees. Remember to never miss a payment. Be careful to not let anyone know any of your information, your pin, or get your card. It may lead into identity theft and they can take your money. Don't have multiple credit cards, it can harm your credit score and it can cause a lot of problems.