Credit Newsletter

Denise Balseca 7/8

The Basics of Credit - Buy Now Pay Later

What is Credit?

-Ability to borrow money in return of future payment to the lender that's giving you the money.


What are the forms of credit?

-Personal Loans, Credit Cards and Credit


What costs are associated with credit?

-Pay annual interest (APR or annual % rate)

(Charged for borrowing)


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

-Depending on your credit score, creditworthiness, ability to pay a loan and if you have a good credit.

Also...

- Your Credit Report is an individual's history and record and you will identify if he/she has a good credit.

-Credit Bureau can make companies see if you qualify and get credit.




Vocabulary Watch


3 C's of Credit


Capital

-Value of what you own

-Savings investments, property

-Use capital to pay loan if needed


Capacity

-Financial ability to repay loan

-High enough income

-Major expenses &debt


Character

- Sense of financial responsibility

-Dependability

-Steady Job

-Residence (Long Term)





The Basics Of Credit Cards: What you need to know

Credit Card- Card issued by bank for users as a system of payment


Common Cards: VISA, Master Card, & Discover


Use of Credit Cards- You can use credit cards anywhere


Benefits and Costs


Annual Fee

-Required annual $ amount you must pay 15-$100


Interest (APR)

0%to %29

-Pay entire balance by due date; No interest.


Credit Limits

-Max amount you can spend using card

-Over limit

Approx. $30 from each change made.


Credit Card Fees

Over the limit

-Over credit limit


Late fee

-Making late payment


Penalty Fees

-Additional fee due to late payment, over credit limit, returned payment, etc.





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

As a smart consumer you will learn many ways to stay safe while using credit cards. Like there's many positive or negative ways it has impacted the economy. Credit cards tend to be easy to use but sometimes not quite safe. Credit allows consumers to purchase more goods and which leads to more people to make goods and to good jobs. There's a few negative aspects that we need to be aware of. The following are:


-People overuse credit

-Fall into heavy debt

-Can no longer purchase goods- must pay debt

-Decrease demand for goods= decrease need for jobs

-No job= less spending

-Less spending- Lower demand for goods =jobs cut

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Considering Credit Card Costs


  • Considering a loan as opposed to using a credit card


  • Pay Credit card balance in full


  • Choose card wisely



Other tips:

-Avoid too many cards

-Pay in cash

-Do NOT miss any payments

-Read what you sign

-Avoid identity theft

-Seek credit counseling

-Beware of bankruptcy