Credit News Letter 2013

Alan Herrera

Questions

  • What is credit? Credit is when a person buys good and services and then ends up paying for the items later in the month/week. unlimited spending.

  • What are the forms of credit? The forms of credit are credit cards, installment loans, Merchant charge cards, Lines of credit, And Mortgages.

  • What costs are associated with credit? discount fee, reward redemption fees, foreign transaction fee, reward recovery fees, payment protection fees, paper statement fees.

  • What determines if someone gets credit and how much they get? What determines it is if you already have a good credit score, how much are you willing to spend per month, Are you careful with not wasting too much money on the card, And are you 18 and older?.


Vocabulary words

  • Credit- The ability to buy goods and services before payment, and then later pay the money in the future.

  • Credit Score- A measure of a persons way of keeping up with their credit and are they responsible of using a credit card and not overspending and wasting too much money that you don't have. Usually based on points such as 300 being the lowest to 850 being the highest so credit companies can see what type of credit person you are.

  • Credit Bureau- A company that collects the credit ratings of individuals and distributes it to a credit company, financial institutions, and other resourceful companies.

  • Credit Report- A record of a persons past of borrowing cash or paying cash also there is info about late payments and bankruptcy/lack of money.

  • Creditworthiness- Qualification for borrowing money based on a person’s credit history

  • Interest (APR)- It is a charge for borrowing a certain amount of money from a bank.

  • Lender- An organization that lends money to people in need.

  • Credit Cards- a plastic card issued by a bank for the purchase of goods and services on credit and be able to pay later.

  • Personal Loans- A consumer loan for personal (medical) family (education and vacation), or household use (Computer, refrigerator, and air conditioner.

Vocabulary watch

Important credit vocabulary terms.

Personal loans, Credit Bureau, and Interest (APR).



Credit cards what you need to know

There are some rewards for using a credit card.

You can use the credit card to buy almost anything

You get ranked on responsibility based on a credit score

You have to pay every month to not get a penalty

make sure to keep track of your credit limit

your card company can not raise interest rates on existing balances or accounts in the first year except when a introductory rate ends (at least 6 months), you have a variable rate card, and you are more than 60 days late with payments.

Using a credit card is a good way to start your credit score



Questions to answer

  • What is a credit card? A credit card is a card that a person would use for when they want to buy items such as food, clothes, House, and car when they don't have the money to pay for it.

  • Where can you use credit cards? You can use a credit card just about anywhere such as a groceries store, sears, target, walmart and other places that sell goods.

  • What are the benefits and costs of using credit cards? Costs are Overspending, Extra fees/unexpected fees, End up on a budget, get a Low Credit Score, High interest rates and annual fees. benefits are chargebacks, extended return policies, extended warranties, price protection, cash without cash advance fees, airline credit, lastly damage and theft protection.

Vocabulary words

  • Annual Fees- Fees on a yearly bases for having a credit card.

  • Credit Limit- The maximum amount of credit that a financial institution, or other lenders will extend to a debtor for a particular line of credit. How much money a person can take out at once out of their credit cards.

  • Interest Rate (APR)- the rate at which interest is paid by borrowers for the use of money that they borrow from a lender.

  • Penalty Fees- fees that if you don't pay for your card on time, or spend your credit limit, usually your credit company will hit you with a late fee or overlimit fee.

  • Over-the-limit fee- a fee charged when your balance goes over your credit limit.

Smart Consumers: Dont fall into the credit card trap

Be careful and read the printing of the terms and conditions of a credit card you can get an unexpected fee

Don't overspend

keep track of your spending

Choose a good bank that you trust

Make sure you have sufficient funds in your account.

Cash advances are expensive ways to get cash, instead use an atm or a debit card to withdraw money from your checking or savings account.


Look for online bill pay, pay by phone, or automatic payments that do not carry a fee.