Education on Credit

The Basics of Credit

What is Credit? Credit is money that is given to you by a lender to make big purchases on items but, its not free money so you will eventually have to pay back the used credit. What are the forms of Credit? The forms consist of two simple things: Personal Loans and Credit cards. Loans are money given out to people with a given interest rate to basically help someone make a big purchase. Credit Cards are like the same thing except, its just a card with a certain balance of credit that you have available to use. What costs are associated with credit? These costs is the amount that you have spent and still have to pay back. Then there's Annual Percentage Rate (APR) which is an interest rate that charges you depending on how well you pay back the money. The later you pay it back, the higher the APR, if you pay it on time then you will usually have lower APR's. What determines if someone gets credit and how much they get? Your credit worthiness determines if you can get credit or not. Your credit score determines how much credit you get. The credit score can be received from a credit bureau such as transunion, equifax, or experian. From the credit bureau you can get a free credit report per year that will determine your current credit score.

Credit Cards: What You Need to Know

What is a credit card? A credit card is a card given with a certain amount of balance based on your trustworthiness and credit score. There is a credit limit to how much you spend and if you go over that limit it will result in over-the-limit fees and penalty fees. Where can you use your credit cards? You can mostly use them everywhere you go. Places like malls, restaurants, sporting events can be used by a credit card. It is very helpful if you don't like holding a bunch of cash in your pocket. What are the benefits and costs of using credit cards? The benefits are that you don't have to carry a lot of cash on you. It helps you make bigger purchases at stores. Another benefit is that you can order online and pay with a credit card so you don't have to go to the actual store. The costs of having a credit card would be the annual fees it has. An annual fee is a fee that is issued yearly depending how well you repaid the amount used. Interest rate is also another cost that is given to the spender to pay so the lender can earn a little money.
Big image

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

Here are some tips about how to stay safe when using credit cards. Once you get your credit card sign it right away on the back. This insures safety to you and your card. After that only use your card for necessities only and don't max out your balance. Keep track of what you purchase because it will help you stay organized for your payments. Don't give out information because then you can have your identity stolen. Also make sure to pay more then the minimum balance.
Big image

David Flores P.2