Credit Newsletter

Erica Bustillos Period 1 West

Section 1: The Basics of Credit

What is credit?
  • Credit is basically the ability to borrow money but there is a promise to pay it back in the future with interest. You "buy now, pay later."

What are the forms of credit?

  • The forms of credit are installment, revolving, and open credit.

What costs are associated with credit?

  • Credit it is not free. There are annual interest rates (APR) that you have to pay. If you use a credit card to pay for things, there is fees and interest associated with it. The credit card is like a lender, you are borrowing money for that purchase. If you pay your entire balance before the due date then there is no interest. Also, if personal loans are taken out, there is an interest charge on that as well.

What determines if someone gets credit and how much they get?

  • You have to prove your creditworthiness, which is your reliability to pay the loan of money back. This is determined by your character, capacity , and capital. The credit bureau collects credit information of the people. Your credit report is also looked at which shows your credit score and and other credit information.

Section 2: Vocabulary Watch

Section 3: Credit Cards: What you need to know

What is a credit card?

  • it is a card that lets you purchase items and those items are added to your credit. It is a way to pay for things without actually having the cash. Although, this borrowed money is to be paid back later. There is a credit limit which is the max amount of money you can spend.

Where can you use credit cards?

  • You can use credit cards almost anywhere. Most stores accept them.

What are the benefits and costs of using credit cards?

  • The benefits of using a credit card is that the consumer can buy more. There are many costs to using credit cards. There are interest rates (APR) that are charged if your bill is not paid on time. If you go over the credit limit there is an over-the-limit fee. There are also penalty fees that are additional fees due to late payment or over credit limit. There is also an annual fee that you must pay for using a credit card.

Section 4: Smart Consumers: Don't Fall Into Credit Card Trap

If you are going to use a credit card you have to be smart about it so that you do not fall into debt. it is important to pay your credit card balance in full that way you do not get charged a late fee or more interest for not paying it on time. Avoid having too many credit cards. There is a chance you can exceed your expenses and be in debt. Make sure to never miss your payments and read what you sign. It is also important that you avoid identity theft because it can cause you to lose a lot of money. Choose your card wisely as well, the least expensive one has the most benefits. Also, if you can, consider a loan as appose to using credit cards because the interest rate can be lower. By following these safety tips, you can be safe while using your credit cards.
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