Chrystal Arreola

Section 1: Basics of Credit

What is credit?

Credit is the ability to borrow money by promising that you'll pay it back later, like a lender. A credit card is how most people borrow the money. It also isn't free. You must pay interest.

What are the forms of credit?

Forms of credit can include loans for houses, cars, or even school. To be able to get a loan banks look at your credit report to see if you have ever been late repaying anything bills. Credit bureaus are the companies that make this available to others.

What costs are associated with credit?

Costs that are associated with credit is interest.

What determines if someone gets credit and how much they get?

Something that determines if someone gets credit is their creditworthiness and credit score. Your creditworthiness is your reliability to pay back loans, such as a personal loan or student loan.

Section 2: Vocabulary Watch

Credit History- record of individual’s past borrowing and repaying

Claim- making a demand for money under the terms of an insurance policy

Collateral- pledged as security for repayment of a loan

Section 3: Credit Cards- What you need to know

A credit card is a card that allows people to purchase goods and services. A credit card is great but there are consequences. If you purchase something and don't pay it off right away, you can begin to have annual fees. In these annual fees, there may be an interest rate in which it increases the amount of money you owe. For many credit cards there is also a credit limit. With this, the bank can control up to how much you can spend. If you do go over the credit limit, there may be over-the-limit fees. Also, when using credit cards, there may be penalty fees for using the card somewhere where it is not registered or accepted.

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

To be a smart credit card holder there are many tips that you can use. Make sure you never give away your pin or leave your credit card where someone can steal it. Another tip for you to be a smart consumer is to check your account frequently. That way you are on top of everything and you can see if anything is being charged that you did not pay for.