Credit Project

By Malari Richards

The Basics of Credit

Credit is borrowing money and then promising to pay later. The two types of credit are loans and credit cards. This includes student and personal loans. There is a cost to this however. It's not free and you must pay interest/APR. The determining factors if somebody receives credit or not are based on your reliability to repay a loan and the three C's which are: character, capacity, and credit.This makes up what is known as your creditworthiness. Credit bureaus keep a record of this alone with your credit score and credit history. Lenders then request this information when you o to apply for a credit card or loan.

Credit Cards: What You Need to Know

A credit card is a piece of plastic that allows you to charge things. Credit cards can be used any place that accepts them online and off. The benefits of using credit cards are that you can buy things that you can't afford and can make purchases online without needing a gift card or prepaid card. The cons of credit cards are the many fees and interest. This includes annual fees for using the card, penalty fees for not paying your bill on time, and over the limit fees for spending more than your credit limit (or the amount of money you are able to charge). Interest rates or APR is also tacked onto you bill every month and can rang anywhere from 10.99-22.9%.

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

  • Only have one credit card or loan at a time

  • Buy no more than you can afford to pay off in one month

  • Use a credit card only to rack up credit

  • Don’t waste leftover loan money, put it into savings

  • Don’t neglect your bills