By: Nada Marei.
The Basic of Credit.
Credit is 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 ?!
Types of credits : store credit, 0 % finance or interest rate, credit cards, personal/student loans, regular loan, auto loan those are the most common forms.
What costs and benefits are associated with credit?
Credit is basically the ability to borrow money in return for a promise of future payment, for example, you can buy things you want now and pay for them later! There are so many costs and benefits that are associated with credit; for costs, you will have to pay APR which is also known as annual percentage rate, you will have to pay Annual fee in some of them for example Payday lenders/loans, like Primor secured visa gold credit card, you will also have to pay other fees such as, late payment fee, Balance transfer fee, and last but not least cash advance fee, and debts. You should be aware, and pay close attention to APR's, annual fees, and other things when applying for a credit card! All of those information were for the costs that are associated with credit, now on to their benefits. Credit cards have a lot of benefits as well, they offer their consumers rewards, special offers, unrestricted travel booked, redeeming points for any amount to credit your travel, and earning unlimited miles for every dollar you spend on purchases.
What determines if someone gets credit and how much they get?
What determines is someone gets credit, is that you must demonstrate your creditworthiness, which is your reliability to pay back a loan. Also, lenders judge this using 3 factors : 1- Character : Responsible, dependable, has a steady job + life. 2- Capacity : The ability to pay back a loan, it depends on you job, and income.
3- Capital : Your property, what you already own ($ in bank). They can also check your Credit report, credit history, credit score, and credit bureau to see if you are lying about not being able to pay your loan back, and also they can collect information on consumer's credit and sells it, they have a record of every adult.
It collects info on consumers' credit and sells it.
Credit report/history has your credit information, and your credit score, it's provided by the credit bureau, and requested by lenders, you can get it when you apply for credit, once a year for free, or pay a small fee, and it suspect identity theft.
APR (Annual Percentage Rate), or the interest rate, is the rate that is charged for borrowing.
Credit Cards : What You Need To Know..
A credit card is plastic card that let you buy your stuff or the things that you want to buy now, and then you can pay for them later. Common types of Credit Cards : Visa, MasterCard, Discover, and AMEX (American Express).
Where can you use credit cards?
You can use credit cards anywhere you want, and anytime you want. You can use credit cards to pay for gas, groceries, and other services like a haircut for example.
What are the benefits and costs of using credit cards?
The benefits of using credit cards is that you gain, and earn miles and points, you can get special offers, and rewards, incentives such as, cashback, points, airline miles, and much more. Costs of using credit cards are : 1- Annual Fees : Fees you pay every single year. 2- Credit Limit: It's the limited amount of money that you have on your credit card. 3- Interest Rate (APR): The annual percentage rate is the rate that is charged for borrowing. 4- Penalty Fees: The fees you have to pay when you are late paying something, or passed the deadline, or the due date. 5-Over-the-limit fee: Fees you have to pay when you spend all the money on your credit card, and go over the limit.
Smart Consumers: Don't Fall Into The Credit Card Trap.
1- Stay away from debts (Money that you take or borrow from other people, and not being able to pay it back).
2- Always use credit cards for smart debts (college, school loans, car, house, etc..) not stupid debts.
3- Always pay your taxes, pay the requested fees on time, never be late or else you will have to pay late fee payment, penalty payment and much more.
4- Don't go over the credit card limit, pay the annual fees, pay the interest rates (APR), and pay on time.
5- Use the credit card wisely, and be educated on what your credit is about, and rates.
6- Last but not least, make a budget, and don't go over it!
Information : Credit google documents, Credit Notes, "I Shopped Myself Into Debt Hell" Worksheet and article, 4 quadrants worksheet, and one more website link is listed below..