Basics of Credit

Adilene Garcia

Section 1: The Basics of Credit

What is credit? Credit is ability to obtain goods or services before payment, based on the trust that payment will be made in the future.

What are the forms of credit? Forms of credit would be personal loans,secured loans, unsecured loans,installment loans, and credit cards.

What costs are associated with credit? Costs are associated with 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 they get? It determines a person's credit score is extremely important, as it determines his or eligibility for all kinds of financial endeavors ,such as credit cards and home loans.

Section 2: Vocabulary Watch

When you apply for credit accounts it goes up 10% of your credit score even if you don’t use it.

Credit Bureau tracks a lot more than credit history. Selling data is a primary revenue source for the credit bureau history.

Credit Reports show your history of using credit, including accounts you have, payment history,credit limits, and amounts owed.

The better one's creditworthiness, the more likely it is that a bank or other financial institution will extend credit.

In a Discover card your Interest(Apr) won't go up for paying them late.

Entrepreneurs lend money or take a loan blindly and in the end.

Credit card accounts can have several different APR.

Credit limit is the maximum amount of credit that a financial institution or lender will extend to a debtor.

If you have bad credit personal loans are hard to find especially around this time of the year.

Section 3: Credit Cards What You Need To Know

What is a credit card? A plastic card issued by the bank, and businesses.

Where can you use credit cards? You can use credit cards being fuel,gas stations,restaurants, online shops,stores,hotels,airlines and hospitals.

What are the benefits and costs of using credit cards?

Some benefits are that you can win extra money or earn points each time you use it.

A new annual fee will be added to health insurance providers in 2014 and it is estimated to raise $60 billion.

Asking for credit limits increases and hurts your score.

Interest rates(apr) vary by the type of transaction, whether it is a home loan,car loan or Interest on a credit card.

Penalty fees are made when people pay the bills late,avoid late payments.

For the over the limit fee each month that their balance exceeds their loan limit,borrowers are charged this type of fee.

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


1. Don't use your credit cards everyday for every purchase you make.

2. Don't get into the habit of making small payments because making the only minimum payment each month increases the amount of time it will take to pay off the debt.

3.Don't close out a credit card without knowing how your credit was impacted.

4.Spending habits lead to debt.

5.Don't always use your credit card when you can't afford something.


1. Make wise decisions.

2.Negotiate a lower interest rate.

3.Stay in between 30% of your credit limit.

4. Let your creditor know in advance if you won’t be able to make your monthly payment on time.

5. Maintain a good credit score.