The Basic Of Credits

By; Carlean Vasquez

What is Credit?

You may wonder what is credit. Credit is the ability to be creditworthiness( 3 C's: Capital, Capacity and Character), which mean; when you borrow money in return you have to promise to pay back the lender (Bank) because its not your money, its just a personal loan. But you have to know credit is not free you have to interest (APR). When you have credit cards ,its cards that have min- amount you spend up too and its the bank money but when you have one. To establish a card you must be 18 years old and promise to pay debt ;every adult has a credit Bureau. Which is an record of every adults bounced checks, miss payment etc. Their are positives and negatives when using a credit cards that I will explain. The positive things when you use credit cards you can buy things online, buy things and pay later, pay for gas and rewarded points, get miles if traveling a lot but the negatives are interested (miss payments will get plenty fee and cost), min balance, and checking bounces fee. The Fees that are associated with using credit cards is paying payment late will add additional late due to your lack of responsibility and could also result a in increasing in your interested rate. Therefore, everyone has a credit history which keeps track of your spending and balances. But, your credit history can affect your potential rate on loans or credit cards because if you don't pay on time or have fees they will charge you more and it intends to lower you credit scores. To assigns credit rating (scores) you must have numbers that reflect you creditworthiness and have the ability willingness to pay your bills on time.

What is a Credit Card?

A credit card is a small plastic card issued by the bank, allowing you to purchase good or services. On every card you get, you have a min credit limited but if you go over you limited you will be charge with over-the-limit-fee. Their are other different fees that concluded when you get a credit card such as penalty fee; where you lack to pay your personal loans back or go over due on you bills. Another is annual fee; which is you pay yearly by your credit company each year.

Don't Fall Into Credit Card Trap

Some ways to stay safe when using credit is :

  • Use it for necessary thing
  • don't go over your limit
  • pay fees on time
  • keep track of transaction/balances