All About Credit & Credit Cards

By: Natalie Mendoza

The Basics of Credit

Hello Leyden students! Soon you'll be 18 and might consider having a credit card. Having a credit card can be very useful and beneficial because you don't have to dig through your pockets to pay with cash, you can just simply swipe your credit card. Although it is convenient, it can also be easy to fall behind in payments and can leave you in debt. Credit is having goods and services with out payment based on the trust that the payment will be made in the future. There are many forms of credit including student loans, credit cards, and personal loans. You can receive loans from a lender. One of the costs of having credit and loans is that you have to pay the APR and stay on top of your payments. If you don't pay your payments in time then you have a bad credit score. A credit bureau determines if someone can get credit and how much credit an individual can get. You're creditworthiness is determined by your credit score and how responsible you with paying the payments in time. Credit is simple as long as you stay on top of your payments and are responsible.

What You Need To Know

So what exactly is a credit card? A credit card is a card that allows you to purchase goods and services, which in the long run helps you accumulate credit depending if you pay your bill on time. You can use credit cards just about anymore for example gas station, stores, and just about anywhere. However there are some costs from having a credit card. Some costs are having a credit limit so you can't have all the credit you want. Also having to pay fees such as penalty fees and over-the-limit fees if you're not responsible with your credit card. Fees are only if you're not responsible, however, APR is mandatory to pay. Some of the benefits of having a credit card is not having to worry about making the payment until later when the bill arrives. Also you can pay everything all at once when the bill comes. Having a credit card can be nice because you don't have to pull out cash and count money.

Shopping For Credit

There are a variety of credit cards to choose from so you have plenty of options. 2 credit cards that I chose are Chase Freedom Unlimited and Blue Cash Preferred from American Express. The annual rate for the Chase Freedom Unlimited card is 14.24%-23.24% and the annual fee is $0. The fees includes a late payment fee which is to $15 if the balance is less than $100; up to $27 if the balance is $100 to less than $250; up to $37 if the balance is $250 or more, a balance transfer fee which is either $5 or 5% of the amount of each transfer, whichever is greater and lastly the cash advanced fee which is either $10 or 5% of the amount of each transaction, whichever is greater. An incentive or benefits from the Chase Freedom Unlimited is that you earn $150 back after you spend $500 in 3 months. The other option is the Blue Cash Preferred card from American Express. The annual rate is 13.24% to 23.24% and the annual fee is $75. The late payment and returned check fees are both up to $37 and a balance transfer and a cash advance fee are both either $5 or 3% of each transfer or cash advanced whichever is greater. Some advantages of the Chase Freedom Unlimited card is that you get unlimited 1.5% cash back on every purchase and a disadvantage is that it has a lot of fees. One advantage for the Blue Cash Preferred Card is $150 back after you spend $1,000 in the first three months and a disadvantage is that there's an annual fee of $75. For more information you can visit their websites at https://www.americanexpress.com and https://www.chase.com/ .
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Tips About Credit Cards

  • Always keep up with your payments or else you'll pay late fees and you're credit will go down
  • Choose a credit card that works best for you because there's a variety to choose from.
  • Be responsible with your payments because you don't want to by something really expensive and not be able to pay for it later.
  • With credit cards you usually purchase small things like paying for gas, food, clothes. It wouldn't be recommended to buy a car or a house with a credit card.
  • You can set up a payment reminder so that you can remind yourself to the bill on time.