Credit Card Information

Leyden Graduates

Basics of Credit

What is credit? Make big purchases possible. You have to pay it off, it is not free money.
What are the forms of credit? Prepaid credit cards, student credit cards, loan.
What costs are associated with credit? Discount fee charged by the credit card processing company and the up-front cost of purchasing the equipment.

What determines if someone gets credit and how much do they get? The Four C's, Character: If you are trustworthy, Capacity: a measure of your financial ability to repay loan, Creditworthiness: What is your history?, and lastly Collateral: What do you have of value?

Vocabulary Words

  • Credit: The ability of a consumer to obtain goods or services before payment, based on the trust that the payment will be made in the future.
  • Credit Score: A number based on credit score.
  • Credit Bereau: A company that collects information about consumer's credit history and sells it to lenders.
  • Credit Report: One free credit report at
  • Creditworthiness: Trustworthiness with money as based on a person's credit history; and general qualification for borrowing.
  • Interest (APR): Yearly cost for the money that you borrow. If late APR, raises rate.
  • Lender: A person that lends money.
  • Credit Cards: A small plastic card issued by bank, businesses, etc., allowing the holder to purchase goods and services on credit
  • Personal Loans: A loan that establishes consumer credit that is granted for personalise; usually unsecured and based on the borrower's integrity and ability to pay.
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Vocabulary Watch

  • Annual Percentage Rate (APR): The interest rate for a whole year, rather than just a month/rate, as applied on a loan, mortgage loan, credit card etc. It is a finance charge expressed as an annual rate.
  • Capital: Wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing.
  • Credit History: A record of an individuals's or company's past borrowing and repaying, including information about late payments and bankruptcy.

Credit Cards: What You Need To Know

What is a credit card? It is a good way to establish credit.

Where can you use credit cards? Charities, gasoline companies, universities, credit union, and special interest groups.

What are the benefits and costs of using credit cards?

Vocabulary Words

  • Annual Fees: Pay every year in order to use the card.
  • Credit Limit: The maximum amount of credit that a financial institution or other lender will extend to a debtor for a particular line credit.
  • Interest Rate (APR): The percentage of a sum of money charged for it use.
  • Penalty Fees: Your credit card company may charge a penalty fee if you make a late payment or if you exceed your credit limit.
  • Over-the-limit Fees: How much money you can spend.

Smart Consumers: Don't Fall Into Credit Card Trap

  • Only buy things you can afford with your credit card
  • Sign credit card as soon as possible
  • Don't share information
  • Secure browser
  • Pay more minimum required
  • Don't max out
  • Only for necessities
  • Pay on time
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