Credit Project

By: Joe Sansone

The Basics Of Credit

  • What is credit? The ability of a customer 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? Student loans, credit cards, etc. Loans, secured loans. unsecured loans, installment loans, credit cards.

  • What costs and benefits are associated with credit? Benefits: Make purchases over the phone or online, build credit history, records your expenses, etc. Costs: Chance or large sums of money being stolen, debt, possible fraud, people are compelled to spend more than they have.

  • What determines if someone gets credit and how much they get? Credit score, personal income, debt to income ratio, spending habits/ history, creditworthiness.


Credit- The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.

Annual Fee- Yearly cost of owning a credit card. Many credit card companies offer cards without this.

Credit Worthiness- An assessment of the likelihood that a borrower will default on his or her debt obligations. It is based upon factors, such as his/her history of repayment and credit score. Lending institutions also consider the availability of assets and extent of liabilities to determine the probability of default.

Interest- Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.

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What You Need To Know

  • A credit card is a small plastic card issued by a bank, business, etc. Credit cards allow the holder to purchase goods or services on credit instead of debit or cash.

  • Credit cards can be useful for purchases online, over the phone, gas stations, stores, when buying a home or a car, restaurants and overseas.

  • Benefits of using a credit card: Building good credit, credit limits, being able to buy a vehicle or home, having cash in a secure place, being able to order items from websites

  • Costs of using a credit card: Card fees, annual fees, penalty fees, over-the-limit-fees, convenience fees, interest / APR, surcharges, fraud, credit limits and debt.

Advice For Credit Card Holders


  • Pay your bills and fees on time
  • Apply for a credit card from somewhere with the lowest APR rates
  • Set a budget
  • Understand the terms of the credit card
  • Pay in full
  • Play with interest rates
  • Avoid cash advances


  • Don't purchase items off of suspicious or non-trustworthy websites
  • Don't go over your limit
  • Don't share credit card information
  • Don't Carry all of your cards on you at once
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