What you need to know

Section 1 The basics of credit

Credit is the ability to borrow money and repay in the future. Different ways of credit are open, revolving and installment credit. In order be able to borrow a lot of money, you need to have good credit. This is called your credit score which is estimate of the ability to fulfill financial commitments, based on previous dealings. These dealings include personal loans or lenders like car dealerships. If you have payed back, you will certainly have a good credit score which is an evaluation to know much credit you have. It will also show that you are creditworthiness and companies will no that you are trustworthy. The credit bureau collects this information and is public to other companies. With loans and credit, there will usually be APR which is interest you will have to pay off including using credit cards.
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Section 2 Vocabulary Watch

APR is important to know because this can either be a good thing or a bad thing. If a dealership is charging you .3 percent for your car payment and another one will charge you 1 percent, it is better to take the .3 percent because you can save allot of money.

Maintaining a good credit score is important because it gives you the ability to borrow money and the ability to buy a lot of good things.

Being a creditworthiness person allows for companies to have trust in you and can keep the APR down if they know you'll pay their bills

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Section 3 Credit cards

Credit cards are plastic cards that allow you to make purchases. But you must watch out because the bank gives you a credit limit on how much you can spend. If you spend too much, you will receive an over the limit fee. The money used for these come from the bank unless you have a debit card which is your own money on a card. If you have your own money, the bank will give you an interest rate depending how much money you put in the bank. Some banks have penalty fess for not using your credit card or for not having enough money in your bank account. The benefits of using a credit is that you can buy items at the moment and pay the bank back later. Lastly, annual fees can and will be included, like for having your account open can be a small fee that you'll pay.
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Section 4 Smart Consumers: Don’t Fall Into the Credit Card Trap

The first thing to know about your credit is to know the rules of your card so that you are not left with any surprises. Then make some rules for yourself about your card. Pay the bill on time to reduce late fees. Use your cards for needs and not wants so that you don't go into debt. Lastly, do not use all of your credit money if you do not need too.