How to handle credit
Credit is a means by which goods or services are obtained without immediate payment, usually by agreeing to pay interest
Interest, APR (Annual Percentage rate), and fees are costs associated with credit
There are 3 main types of credit:
Installment credit- is money that you borrow and promise to pay back in a specific amount of time in equal payments
Revolving credit- is borrowing money if you have good credit and promise to pay it back in full or in partial payments an example would be a credit card
Open credit- This type of credit requires that all money borrowed must be repaid in full every month.
Usually the determining factor of a lender giving credit or personal loans are a persons Credit score, Credit worthiness, and credit report. This is can be acquired by contacting the credit bureau
Credit limit-is the maximum amount of credit that a financial institution or other lender will extend to a debtor
Collateral-in the context of project financing, additional security pledged to support the project financing.
Capital- is money used by entrepreneurs and businesses to buy what they need to make their products or provide their services
Credit Card- Any card that may be used repeatedly to borrow money or buy products and services on credit. You should only use credit card when you need something because the loaned money has interest on it and you run the risk of going over your credit limit which lead to penalty fees and over-the-limit fees. Also with every credit card you there are hidden cost like annual fees for example. Some reason to using credit cards are sign up bonuses, cash back, and frequent flyer miles.