It's Just Credit

Tony Brosman

Section 1: The Basics

Credit is the ability to borrow money now and pay it back later. A higher credit score means you're more creditworthy, and you are capable of borrowing more money from your lender. Credit comes in many different forms, from credit cards to personal loans. Credit cards are mobile cards with a max spending amount, which varies between people, that can be used almost anywhere. Personal loans are given to qualified borrowers looking to purchase something with a high price, such as a car or house. Credit can be beneficial, but it can also destroy you. If you're credit is bad, you won't be able to rent a house, sign for a car or get a loan for a house. To check your credit, request a credit report. You can receive a credit report from any legitimate credit bureau.

Section 2: Vocab Watch

Credit Bureau-Company which provides you with your credit report. They are required to give you one free report per year, anything after that they can charge you.

Interest-payments made on borrowed money. The interest is not included in the amount borrowed but is actually a fee.

Credit Report-a report of your up to date credit score, including owed debts and credit debt history.

Section 3: Credit Cards: What You Need To Know

Credit cards are small, plastic cards that are used for borrowing money. Every time you swipe the card, you borrow money from a lender, who you will have to pay back the whole price plus the interest rate. Credit cards are usable almost everywhere. Many places actually only accept credit cards, so they can charge you for anything else need. Because you can use them almost anywhere, they are extremely convenient. instead of carrying cash, you can carry one convenient card and not lose anything. They can also be harmful, considering the interest you rack up and the fact that you can pull in huge amounts of debt without noticing at all if you're credit limit is high. If you do exceed the limit, they throw a penalty at you called the over the limit fee. They also often require you to pay annual fees, which is a fee just for holding the card.

Be Careful!

The best thing I can tell someone who is a new credit card user is that you don't have to go into credit on your own. Review your credit report and spending habits with an experienced card user, run you're decisions by this person to decide whether or not it would be wise to use the card, and you will find yourself learning about the pros to credit cards without having to worry about the cons.