What is credit?With a credit card you are able to purchase goods or services before payment, based on the trust that payment will be made in the future.
● What are the forms of credit? Credit card, credit, personal loans
● What costs are associated with credit? You must pay interest- APR or annual % rate
● What determines if someone gets credit and how much they get? you must show your creditworthiness. This means that when you take out a loan that you pay it back on time every time so your credit stays high. The higher it is the better and the more money you can get for a loan.
Vocabulary Watch :
● Credit Limit
● Interest Rate (APR)
● Penalty Fees
● Over-the-limit fee
What is a credit card- A small plastic card issued by a bank, business, etc., allowing the holder to purchase goods or services on credit
Where can you use credit cards? Anywhere that offers a credit card machine. Stores, food restaurants, to pay bills, and to order online.
What are the benefits and costs of using credit cards?
The benefits of a credit card is that you have instant money without necessarily having cash in your pocket. However, there are many costs. The annual fees are required payments you make once a year to the credit card company paying of the credit you have used. Depending on your income, you have a credit limit. This means you cannot go over a certain amount of money that the credit card company offers. If you go over your credit limit you will pay a over-the-limit fee.This number is based on your credibility. Each month you have a credit payment to pay off what you used during that month. If you cannot pay this off each month, you receive penalty fees, that add on to the next month. These fees will affect your interest rate because your % will increase.