Alyssa Richardson pd. 1
Basics of credit:
Forms of credit: One form of credit is a credit card, which is a card that you buy things with at the moment and pay later. The other form is a credit loan which is money that you borrow from the bank with a promise to pay back. These could be used for school loans, house payments. Also known as personal loans.
Costs associated with credit: A cost that is associated with credit is interest. This means that if you spend too much of the money that the lender loaned you, you get fined extra.
Determining credit: When you want a credit loan from the bank, your credit score needs to be looked over to determine if you are trustworthy. How trustworthy you are with credit is called creditworthiness. The people that determine if you are creditworthy are the credit bureau who basically just look over your credit report and your score.
What to know about credit:
Where to use credit cards: You can use credit cards anywhere that accepts them. Gas stations, clothing stores, restaurants, etc.
Pros and cons of credit cards: There are many good things and bad things about using credit cards. One good thing is the quick and easy way to buy things without the burden of paying on the spot. But it also comes with bad add-ons. For example, all of the fees you'd have to pay. There are penalty fees, fees that you receive when yo violate your agreement you made with the bank about the money you'd spend. There is an over-the-limit fee. A fee that you get added on monthly for exceeding their credit limit balance.