Credit Education

Get knowledge now before it's to late!

The basics

Before anything we have to get an understanding of credit and the basics that go along with it. Credit is the ability of a costumer to obtain goods or services before payment using a credit card, based on a trust that the payment will be made in the future. With that said, you earn this "trust" by your credit score this determines how much credit you can receive, if any at all.

How do you obtain this credit score? Well its fairly simple, there are people out their called credit bureaus who gather your credit information such as spending habits, debt, loans etc. for potential lenders and come up with what is known as your credit report. This is basically an informational way to tell of your creditworthiness, or in simpler terms, the probability of how responsible you are to pay back your credit.

With credit you can take out student loans to go to school, credit cards for goods, and even personal loans to help buy houses or cars. The only catch is, the interest, you do end up paying an abundance of extra money, but you can pay it off over time with smaller payments instead of all at once.

Credit does have its benefits though, besides being able to help you purchase items a lot of credit cards come with benefits and rewards for using their company. Also, with the amount of competition going on between all the different companies there is always many options to pick the card with the right benefits for your spending habits!

Vocabulary watch

Need to know questions!

Frequently asked questions

Q. What is a credit card?

A. A credit card is a small plastic card issued by a bank or business used to purchase goods.

Q. Where can you use credit cards?

A.You can use your credit card generally just about everywhere and it makes shopping a lot more convenient without having to carry around cash. The better your credit score the higher your credit limit is on how much money you may spend.

Q. What are the benefits and costs of using credit cards?

A. Benefits would be you have more money to spend to make bigger purchases if need be, you also get rewards from using credit. The rewards are based off of what benefits you from your specific card.

Some costs of using credits cards are if you are not responsible and go over your limit available to spend you get charged an over-the-limit fee also irresponsibility leads to penalty fees which occur when you don't follow the agreements of having the card. Depending on the type of credit card you chose you may have annual fees having to pay for the services of the card every so often. Also an interest rate is given on all purchases to better secure that you will pay back.

Being a Smart Consumer!

While using a credit card you want to always make sure you pay back on what to spend as you don't want your debt to accumulate nor d you want a bad credit score. Keep bills paid on time and try to track what you spend so you know what kind of budget you have. Also, be responsible when spending don't over spend or swipe your card just because you feel you can. Always remember you have to pay this "invisible money" back.