What is Credit?
What are the forms of credit?
What costs are associated with credit?
What determines if someone gets credit and how much they get?
● 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?
Where can you use credit cards?
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
● 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 transunion.com annualcreditreport.com