How to handle credit


Section 1

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

Section 2

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

Section 3

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.

Section 4

In my opinion I believe credit card are useful but dangerous. From what I know You try to keep from using a credit card use only for emergencies. Try to pay more than the minimum each month and pay on time each month to keep your credit score high.