Using Credit Wisely

As a consumer learn how and when to use credit

The Basics of Credit

As you get older you start taking steps towards adulthood and responsibilities. A big step you must learn/control is how to use credit wisely. There are two types of credits personal loans and credit cards. For starters to get credit you must demonstrate worthiness (credit worthiness) to be reliable to pay back a loan,also you need residence and be dependable with a steady job. Credit is known as a lender. To help you see if you have good credit you have a credit report that comes from the credit bureau. In this credit report you get a credit score that is important because there are effects on these scores.If you pay on time, have low debt,long history,and limits on credit this all helps your credit score and keeps your interest from changing or increasing.The credit score determines if someone gets credit and how much they get if your score is in the 700-850 range your more likely to get approved and you get more credit.If you're in the 200-400 your less likely to get approved and not get that much credit.

Vocabulary Watch

  1. Credit Worthiness-is reliable to pay back a loan.
  2. Credit Bureau- firm that investigates creditworthiness and assigns a credit rating to a consumer
  3. Interest (APR) -Percentage of the sum borrowed.

Credit Cards:What You Need to Know

A credit card is a plastic card issued by the bank, or business,that is used for purchasing goods or services on credit.With credit cards you can buy things, withdraw money from an ATM and make balance transfers,there are different interest rates depending on which card you choose.There usually is an annual fee which is any fee that is changed yearly.You can also get credit limit which is the most that a credit card company will allow a person to take out at once on a card.With credit cards you have a responsibility to uphold if you don't uphold them you get fees. If you don’t pay your credit card bill on time, or if you spend over your credit limit, generally your credit card company will hit you with a penalty fee or over-the-limit-fee.The benefits of a credit card is you don't have to carry money or a checkbook around,also if you are traveling to a foreign country you don't have to carry around foreign currency.

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

Some people are out of control when it comes to credit. The percentage American consumers owe in debt is $11.38 trillion. We need to help some people with their credit problems here are some tips that could come in handy.When looking at credit card companies make sure you find a company where they have everything to fit into your finances. If you're signing a contract with a company make sure you read the whole terms and regulations so you know what you're agreeing to. Don't enter your credit card into an unsecured website,make sure your browser displays the secure lock on it.When receiving your credit card sign the back of it, if you lose it and it's not signed someone can sign it and use it as a fraud.Never write your pin on credit card,wallet,or keep it with your credit card. If you change your address inform the bank immediately.Don't carry to many credit cards around with you.With these tips you can stay safe while using credit cards.