The Basics of Credit
● What is credit?
Credit is the ability to borrow money in return for a promise of future payment. When you pay on time your credit score will increase.
● What are the forms of credit?
Credit cards & personal loans. This will determine if you are credit worthiness.
● What costs are associated with credit?
● What determines if someone gets credit and how much they get?
Demonstrate your credit worthiness. Character, capacity, capital.
Credit limit: how much your credit card can hold
Credit history: a record of all your credit card uses
Credit card: a card you use to buy stuff instead of cash; can buy stuff online but you pay back everything you bought and there are penalties if you are not cautious
What you need to know about Credit Cards
● What is a credit card?
A credit card is a card that you can use to pay instead of cash. It has a credit limit. If you don't pay them on time then you get a penalty fee. If you spend more cash than your credit card holds, you get an over-the-limit fee.
● Where can you use credit cards?
At stores and online.
● What are the benefits and costs of using credit cards?
You don't have to carry around cash. You can buy stuff online that you can't with regular cash. Although there are penalties if you aren't careful. There is also an annual fee.