Need to Know About Credit?
By: Stephanie Cornejo & Anais Villafana
The Basics of Credit
Smart Consumers: Don’t Fall Into the Credit Card Trap
Avoid more than 1 or 2 cards
The more cards, the more debit you're considered to be in
Pay all your bills and in full payment
Avoid paying after your deadline-you will get penalized.
Purchase things like groceries and clothing etc.
Make sure it's something you know you can pay later on.
Credit: The ability to borrow money with the promise of paying the money back.
Credit Score: The score assigned to you that demonstrates how good your credit is. The higher, the better.
Credit Bureau: Collects information on consumers' credit and sells it.
Creditworthiness: Your reliability to pay a loan back
Lender: The person who gives the loan.
Credit Cards: What You Need to Know
You are allowed to use a credit card wherever they are accepted. It can be used to pay for groceries, bills, clothing, and anything else.
The benefits to using a credit card is that money is available when you don’t have it in the moment and you are allowed a minimum amount of days to payack. Another positive thing is a credit card can help create credit for future purchases like a car, house, loans, etc. A disadvantage to having a credit card is that if you aren’t responsible with paying back your bills that you owe, you can ruin your credit and later on hurt you in future purchases or applying for a new card.
When opening a credit card, many different things come along with it. Many credit cards have annual fees that come along, if too high that can a problem. Along with each card, comes a credit limit, each person has a different credit limit depending on their income, past credit, and different things they have purchased in the past. With a credit limit, as well comes an APR, which is the interest rate on your card. Most cards can have a very high APR, but if you are sure with paying your bills back on time and in full amount, you can avoid the high APR on your bill and you can avoid the penalty fees that apply. When you are given a credit, you are to not pass the limit they give you, if you fail to do so, you can end up paying an over-the-limit fee and other penalty fees may apply.