Credit Newsletter

Yoana Cortez, Consumers Ed, Period 1

Section 1: The Basics of Credit

Credit is the ability to buy something now and pay for it later, it's a lender. Lets say you see something at the store and you don't have money to pay for it now, you pay with your credit card and it's like a personal loan, but you have to pay for it later. The two forms of credit are loans and credit. Keep in mind that credit is not free, they charge you a certain amount of interest to pay them back. While making a bank account, find out their Annual Percentage Rate. Credit Worthiness basically is how reliable you are to pay a loan. A credit bureau will collect information about your credit history to sell it to lenders. Will have a credit report, with personal data and your credit history. Credit score determines if you're a good risk or a bad one.

Section 2: Vocabulary Watch


  • can avoid paying interest sometimes
  • most of the times you are charged interest for each payment
  • buy something now, pay later

Credit Score

  • statistics based on your credit files
  • how lenders see your credit risk
  • determines if you're a good risk or bad

Credit Report

  • individual's credit history
  • personal data
  • credit history

Section 3: Credit Cards What You Need To Know

A credit card is a plastic card connected to bank account and lets you purchase goods. As you make your payments make sure to do them on time or else you get penalty fees.

Annual fees can be as much as $15- $100. All accounts have a credit limit, meaning that this is the maximum amount you're allowed to spend. If you pass your credit limit, there is an over-the-limit fee. The annual percentage rate is the amount they charge you for every payment you make (certain percentage), based on the total amount of purchase.

Section 4: Smart Consumers: Don't fall into the credit card trap

  • Don't overspend
  • make sure your income is greater than purchased goods
  • spend it on necessary things, maybe emergencies only
  • get a handle on your spending
  • watch where you borrow