Do you know anything about credit?
Get educated on credit and how credit cards work.
The Basics of Credit
Some people ask what is credit? Most people are not able to answer the question. Credit is "financial trustworthiness".Your credit record is the most important factor lenders(banks) consider when you apply to borrow money. Forms of credit would be Loans vs. Credit cards. You would take out a personal loan for school, buying a car, or buying a house. When buying other things you would typically use a credit card. An example would be furniture. You wouldn't take out a loan to buy furniture, you would use your credit card. Also there can be costs associated with credit. The costs associated with credit are fees and interest. When you take out a loan, you have to pay the bank back what you borrowed plus the interest of how much you took out. Some fees would be if you put something on your credit card and you don't pay it back in time, you will get charged a fee for not paying it on time. After all this information someone may ask, " Well, what determines if I get credit, and how much do I get?" Well, what determines if you get credit would be the credit bureau. A credit bureau is a company that collects the credit ratings of the individuals and makes them available to credit card companies. If you have bad credit, the credit bureau can also determine your interest rate, and what determines how much credit you get would be your credit history and credit score.
Credit Cards: What you need to know.
A credit card is a plastic card issued by the bank or a business to purchase goods on credit. Also the credit card has a Credit limit. A credit limit is a certain amount of money you can spend on the credit card you applied for. You can basically use credit cards where ever visa, discover, master card, and american express cards are accepted. Some benefits of using a credit card would be not having to carry cash around and being able to use your credit card, or not having enough money to pay the item, you can use the credit card. Costs of using a credit card would be Annual fees, interest rate, over the limit fee, and penalty fees. A annual fee would be having to pay a certain amount of money a year. Interest rate, also known as APR is a certain amount of money that the bank or the business will charge you to borrow the money. Over the limit fee would be a fee that you have to pay for going over the credit limit. A penalty fee would not paying the credit card back on time.
Remember to be safe while using a credit card!
Being safe is one of the most important things about using a credit card. Make sure not to go over the limit of your credit card and also make sure to use your credit card wisely. Not taking a credit card seriously can make you go into serious debt, causing you to ruin your credit.
Here are at least three vocab words that you should remember.
Loans are money borrowed from the bank that is expected to be payed back with interest. ( Helps build credit)
Debt-The state that money is typically due or owed. ( Have bad credit)
Interest rate is the percentage sum of money charged for its use.