Things To Know About Credit

by Susan Tellez

The Basics of Credit

Credit is the ability to borrow money to buy things and pay it off later. Most common credit cards are VISA, Master Card, and Discover. There are three types of credits. First, there is Loans let you borrow money that must be repaid with interest. Second, Installment Loans this loan allows you to repay in fixed monthly payments over a specific period of time. Third, Credit Cards are the most common personal credit and allow repeated transactions up to a maximum credit limit. The Credit Bureau has record of every person. Everything from missed payments to bankrupt. Good Credit Score is important. The high the score the better. Your Credit Report is what determines if someone gets credit. Credit Cards Interest are usually from 0% to 29%. Creditworthiness consist of capital, capacity, and character.

Vocabulary Watch

Character: Sense of financial responsibility

Capacity: Value of what you own

Capital: Financial ability to repay loan

Credit Cards: What You Need to Know

Credit card are cards you can use to pay things at any store and pay the bank about later. Credit card have annual fees that range from $15-$100 every year. They also have an interest rate from 0% to 29% depending on what kind of credit card you get. Every credit card had a credit limit and if you go over the limit there are fees that you'll have to pay. Some fees are late fee and penalty fees. If fees aren't pay the card would be declined.

Smart Consumers: Don’t Fall Into the Credit Card Trap

Ask questions before applying for credit card. Watch out for the gatta have it buys. Not all credit cards are created equal so shop carefully. Make sure you understand the terms of having a credit card. Keep it simple and just have one credit card.