Using Credit Wisley

By Gavin Gump

Using Credit Wisely

By Gavin Gump

What is the difference between a credit card and a debit card?

Credit cards are money from the bank that you are borrowing and you have to pay it back and a debit card is money from your own account that is used to pay you don't pay this back.

Describe three ways you can develop a positive credit history.

You can buy small things and pay them off right away. Also you want to never pay the minimum. The last thing you can do is sign up for a credit card.

Give a description of five different financial apps and/or websites that help people manage their money.

Betterment this can help you when you invest. Mint this helps you pay bills in a easy way. Dwolla helps you move money in a simple way. Future Adviser this is used for investment and with savings. InDinero is used for accounting and will help if you own a business.

Explain three advantages and three disadvantages of using credit.

One advantage is its easy and simple. Another advantage is you can buy bigger things and pay them off in a longer but easier payment. The last advantage is with good credit you can get better loans and even get better things. One disadvantage is if you don't pay the payment you will get a lot of interest. Another disadvantage is you end up paying more then the price it says. And the last disadvantage is if you have bad credit you cant buy certain things or get loans.

What is APR and why is it important to know when applying for a credit card?

APR is annual percentage rate and it is important to know because if you have a high APR you will be paying more. APR will make the item you buy more than what it says. Say you want to buy a seaway for 200 dollars with a APR of 18% and a payment of 50 dollars a month it will take you 5 years and it will end up costing 207.79 instead of 200

When and where can you order a free credit report? Why is it important?

You can order a free credit report on creditkarma.com. This is important because if you have a bad score you cant get loans or even buy certain things, If you find errors go to your bank and ask about the errors.

What should a borrower do if they are experiencing financial difficulties?

A borrower should go to a credit card counseling service or call them at 1-800-388-2227
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