Credit For Teens
Inform Yourself About Credit
The Basics Of Credit
A credit is a way to buy what you want, when you want it. It is not money.
● What are the forms of credit?
Some forms of credit are student loans, mortgages, and credit cards.
● What costs are associated with credit?
When using a credit card, you should make sure you choose one with a low Interest (APR). If you do not make your payments on time, you can damage your credit score,(a number assigned to you based on your credit report by the credit bureau).
● What determines if someone gets credit and how much they get?
Lenders determine if you get credit and how much by the Four Cs.
-Character: are you trustworthy?
-Capacity: are you capable of paying off the loan?
-Credit Worthiness: looking at your credit report. Do you pay your bills on time?
-Collateral: if you have something of value, it can be repossessed if you don't repay.
Credit Cards: What do you need to know
A credit card is a card that you use to buy something with credit.
● Where can you use credit cards? Credit cards can be used in stores where you want to buy something that you can't pay for at the time.
● What are the benefits and costs of using credit cards?
With a credit card you can buy anything you want on credit, although there is a limit to how much money you can borrow, also known as a credit limit. If you don't pay your bills, you get charged with late fees. Also, if you choose to transfer, you will be charged with transfer fees.
Smart Consumers: Don’t Fall Into the Credit Card Trap
Be smart and responsible
Check your credit report at least once a year in TransUnion. Equifax and Experian
Call credit companies to stop charges on something or dispute a purchase
Keep your information safe from identity theft
Sign your card
Use a secure browser
Pay more than the minimum balance
Don’t max out