Credit Newsletter Per. 10

Yessenia Diaz

Section 1: The Basics of Credit

● What is credit? Credit is when you borrow money to pay off a product, but being able to promise to pay it off in the future. It is similar to a lender because you are getting money "lend" to you. Anyone can get your Credit Bureau by looking at your past Credit Reports and credit ratings.

● What are the forms of credit? Loans and Credit Cards

● What costs are associated with credit?

● What determines if someone gets credit and how much they get? Their Credit Score determines if they get credit.

Section 2: Vocabulary Watch

Section 3: Credit Cards: What You Need to Know

What is a credit card? It is a piece of plastic that "has money" in it. You can use this if you don't have enough money on hand with you, so instead you pay with the card since you promise to pay them back. Credit Cards can have Credit Limits which start off very small and over time increase if you don't go over the limit. Over time, you can be charged with Annual Fees for using the credit card.

Where can you use credit cards? You can use credit cards almost anywhere. You can use them in restaurants, movies, clothing, grocery stores, etc.

What are the benefits and costs of using credit cards? If you go over the limit from you Credit Card, you may be charged with Over-The-Limit-Fee. It is a Penalty Fee that will increase each month if you do not pay it off. A benefit you can get from using credit cards is that you get Interest Rate (APR) so some things don't have to be paid all at once, but instead, overtime.

Section 4: Smart Consumers: Don't Fall Into the Credit Card Trap

It is a good idea to have Credit Cards with you handy, but do not have many of them. You can have your money stolen or missing but need to purchase that you need. This is were a credit card would come in handy. But also, do not purchase too many items or expensive items. Higher fees will be sent to you at the end of each month so you will have to eventually pay them. Do not get too many credit cards because they are not meant to be used ALL the time, but when you have to. The more credit cards you have, the more fees and annual rates you will need to pay each month.