Let's talk about CREDIT

Lauren Hiatt- Wilson

    • What is Credit?

    • Credit is the money that can be lended to you when you can't afford something you need. Credit comes in different loans with different purposes and different interest rates. There are student loans for students needed more financial incomes to pay for tuition. There are home loans which you work out with a band where you pay monthly for a mortgage or rent. There are also personal loans which can be put toward things like cars and more help with paying for a college education.(: And there are credit cards which you can use practically everywhere. If you spend too much credit and don't pay it back then your FICO score goes down and your APR goes up.

  • What costs and benefits are associated with credit?

  • The benefits of credit are you being able to buy things and pay for the in payments, but a cost are the annual fees which can be up to $100 just for having the line of credit. Credit cards can really hurt you if your credit is really terrible. If your FICO score is 700 and up then most credit cars will give you the line of credit and the extended limits on the line, but if your credit history and FICO score are really terrible you might be denied the credit or be charged a crazy annual percentage rate. Something GOOD about having a credit card is that you have the opportunity through some cards to earn cash back on food and gas.

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

    • What really determines if a person will get credit and how much they will get it the three C's- Character, Capacity, and Capital. Character refers to your credit history and how good or bad it is, Capacity refers to how much they believe the customer can handle, and capital refers to the assets of the consumer.

  • What to expect?
  • Having a credit card mean you are able to buy anything anywhere. You can buy groceries, go out to eat, buy clothes, buy books, and anything you want. But there are things about credit card that everyone should be careful about. First off the late penalty's on many cards are about 35-40 dollars after a grace period. There are also pricey fees for just having a line of credit. So if you have many cards and don't really use the one with the expensive annual fee, your just wasting money. Also APR can be introduced at 0% which can trick many people because after a year most will have an APR of 11-30%. If you have a 29.99% interest rate, that means you probably don't have a good credit score and that causes banks to raise your APR.

  • When choosing a line of credit you have to first have a specific reason for getting it because if you choose to get credit without a plan or a use for it you can end up making impulse purchases which could lead to debt. Choosing a line of credit should be something that is thought through beforehand so you can make sure you will be able to pay the money and APR back within the amount of time. When choosing a credit card know what you want out of it i.e. 0% APR for the first year or the rewarded cash percentage back on gas and things like that. The concept of spend now pay later can be not assuring to banks which means they can charge you up to 23% in APR charges which is the money you spent through the line of credit plus extra to the bank for loaning you the money. At the beginning of your credit history shows that you spent too much or didn’t pay on time, your interest will sky rocket. They base your APR on your creditworthiness which is your FICO score and credit history.

This is me

I am Lauren