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What is Credit?

a privelage that allows you to make a big purchase when you need it but you must pay it off

What are the forms of credit?

car loans, home loans, credit cards, installment loans

What costs are associated with credit?

People have to pay interest, or if paid late they must pay late fee

What determines if someone gets credit and how much they get?

Your credit score and credit report determines this.


● Credit- ability to buy items before payment, based on the trust that payment will be made in the future

● Credit Score-numerate calculation from credit report

● Credit Bureau-company that collects the credit ratings of individiuals and makes them available to credit card companies and finacial institutions.

● Credit Report-shows amount of dept.

● Creditworthiness-likeliness to pay back

● Interest (APR)-annual percentage rate -yearly cost

● Lender-person who lends money

● Credit Cards-good way to start good credit, low limit, secured, student, prepaid

● Personal Loans-a loan that establishes consumer credit that is granted for personal use; usually unsecured (Google)

Basics of Credit

What is a credit card?

card issued by a bank, business, etc., for the purchase of goods or services on credit

Where can you use credit cards?

stores and almost every business

What are the benefits and costs of using credit cards?


  • pay later
  • excellent way to start good credit
  • no need to carry excess amount of cash


  • fines on unpaid bills
  • if stolen, someone can use credit card to purchase items

Credit Card Vocabulary

● Annual Fees- fee charged yearly for use of credit card
● Credit Limit-maximum amount of credit allowed by the lender
● Interest Rate (APR)- interest on loans or credit
● Penalty Fees- fees charged if someone violates the agreements between that person and the lender
● Over-the-limit fee-when a person goes over the maximum limit on their credit, he/she will receive a bill.

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

  • sign credit card
  • dont share personal information
  • use secure browser when paying online
  • beware when using wireless connections
  • pay more than minimum
  • dont max out
  • use credit only for necessities
  • keep track of what you buy
  • ALWAYS pay on time
  • check credit report once a year- use