Credit! Credit! Credit!

Read All About It!

What is Credit?

Credit is an agreement in which a borrower receives something of value now and agrees to repay the lender at some later date. When a consumer purchases something using a credit card, they are buying on credit (receiving the item at that time, and paying back the credit card company month by month). That's how it works. Receive now, pay later. Credit Cards are the most known form of credit. How they work is they offer you a line of credit that can be used to make purchases, balance transfers and/or cash advances and requiring that you pay back the loan amount in the future. They way you can build good credit is by paying those bills on time and in full. By doing this, you can build good credit, a good credit score, and make yourself eligible for student loans, loans from the bank, etc. However, credit cards do have their advantages and disadvantages.


  • Able to buy items now and pay later

  • Don’t have to carry cash

  • Creates a record of purchases

  • More convenient than writing checks

  • Consolidates bills into one payment


  • Interest

  • May require additional fees

  • Financial difficulties may arise if they lose track of how much they spend

  • Increased impulses later

Now, What Is a Credit Card? Anything I Need to Know?

A credit card allows you to borrow money from your bank to make your purchases. Whether it’s food, clothes, or a plane flight, as long as you pay back the money you borrowed within the “grace period” of 25-30 days, you don’t have to pay extra. You can basically use credit cards wherever they allow them. The benefits of using a credit card are the same as stated above. However, with all this being said, there are limits. Such as the over-the-limit-fee. The bank gives you a limited number of money to see, if you go over that limit, you're going to have to pay a fee. Which would be considered a penalty fee.

Need Help? Here's An Example

Now that you have a basic understanding of credit, let’s do a little comparison shopping. Here are two credit cards that have similarities and differences. Follow the chart to gather your information.

Card #1- Chase Freedom Unlimited

Card #2- Chases Slate

Annual Fee

(if any)



Annual % Rate (APR)



Grace Period

21 Days

21 Days

Other Fees:

*Late Payment

*Returned Check

*Balance Transfer

*Cash Advance


The amount you transfer (including fees and interest) cannot exceed $15,000 or your credit limit, whichever is lower.

Benefits/Special Features/Rewards/Services:

Cash Back rewards do not expire as long as your account is open.


Don't Fall Into the Trap!!!

Now I bet many of you are getting excited hearing about all this credit stuff. Being able to buy stuff now without paying and just pay later and all. Seems fun, BUT don't fall into the trap of spending spending spending, and not being able to pay the bills, the fees, and the interest of all the purchases you made. You must make rules for yourself when it comes to credit and actually follow them. If not, it can be really hard to "start over" and/or recover from bad credit. Always keep track of your money, how much you have to spend, and know your limit on your credit card.


Shopping for Credit Document

Credit Basics Document

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