Credit Newsletter

By: Vanessa Salgado Period 7/8

The Basics of Credit

What is credit?

Credit is being able to borrow money and paying it back at a later time. You must pay interest on the money you borrow.


What are the forms of credit?

The forms that credit comes in are personal loans and credit cards. A personal loan is money that was borrowed directly to you. This is money that you have to pay back in the future. A credit card is money that is also borrowed and has to be paid back at a later time. There is a fee if you go over your limit. This money can be used to buy anything.


What costs are associated with credit?

In order to get credit you have to show creditworthiness and that means being able to pay back that loan. That is decided by lenders and they decide by character,capacity, and capital.


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

The credit bureau determines if someone gets credit. They check if a person missed a rent pay or if they are bankrupt. Credit score also determines if someone gets credit. The higher their FICO score is the better. Credit report looks are your credit information to make sure you are not an identity thief. They check your credit score once a year as well.


Vocabulary Watch

Creditworthiness

Creditworthiness is how reliable you are when it comes to paying back that loan. Lenders are the ones that judge using character,capacity, and capital. Character is your sense of financial responsibility. Capacity is your financial ability to pay back the loans. Capital is your savings, property, and basically the value of the things you own. This information is received by the credit bureau and loan application.


Credit Cards

Some of the common credit cards are VISA, MasterCard, and Discover. You must pay the balance in full. You can get your first credit card when you turn 18. It is better to start small, like a store credit card. There is an annual fee and it is between $15-$100. There is interests, but if you pay the balance by the due date then there is no interest. There is a maximum amount of money you can use on a credit card and if you go over the limit there will be a fee or your card will be declined.


Credit Report

Credit report is your credit information and your credit score. This is provided by the credit bureaus and it is requested by lenders. Credit report is looked at when a person applies for credit. You're credit report is once a year for free. but if you want it checked more times you have to pay a small fee. Credit report is also looked at when there is suspected identity theft.

Credit Cards: What you need to know

What is a credit card?

It is a card that allows you to borrow money, but you have to pay it back at a later time. There is an annual fee when using a credit card. It is from $15-$100. There is also interest rate that is %0-%29, but if pay the whole balance by the due date then there will be no interest.


Where can you use a credit card?

A person can use a credit anywhere they like. A credit card may be used at almost every store, but sometimes there is a certain amount of money you have to pay before you can use a credit card. The limit can be $10.


What are the benefits and costs of using credit cards?

The benefit of using a credit card is that you can use credit money when you are broke. Then, instead of having to use your money at that moment, you can just pay it back at a later time. A cost is credit limit. A credit card doesn't have unlimited amount of money. If you go over your limit there are penalty fees. The over-the-limit fee is when you go over the credit limit. That means you have to pay back what you used AND the penalty as well.

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

When you use a credit card, don't go crazy with it. As a matter of fact, don't get a credit card until you are over 21. That way, you are more responsible when using it. You should only really use credit card when there is an emergency and you have no money to spend for wants. The smartest thing to do when using a credit card is to only use enough money that you will be able to pay back. Some other things to think about when using a credit card is only using the amount of money that is in your credit card. You don't want to go over the limit and have to pay extra fees that you probably won't be able to afford.