Credit is the ability to borrow money in return for a promise of future payment.

Interest is a factor in credit, and you must pay it. In order to get credit, you need to demonstrate creditworthiness, character and capacity. Credit companies can determine these factors by checking them with the Credit Bureau and with loan applications. Everyone has their own credit score, which goes from 300 to 850. Interest rates may be lower when using a loan instead of a credit card. Other ways to keep it low is to avoid minimum payments and don't miss monthly payments.

Credit Cards

Credit cards a form of using credit by using a card from a credit company. You can use credit cards at pretty much any store and restaurant. You can also use them when buying things on the internet. Benefits of using a credit card include being able to purchase things without cash, and able to pay back later. They also help with emergency purchases. Costs of using a credit card can be going into credit debt, and people tend to use them on unnecessary things like fast food places and it adds up with all the interest. Annual fees are yearly fees form the credit company, which are usually from 15$ to 300$. A credit limit is a maximum amount of credit one can have, which is often determined by creditworthiness and capacity (financial ability to pay). If someone goes past their limit they will get a fee (over-the-limit-fee).

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

There are a few tips to say safe with credit cards. Make sure monthly payments are always paid, because if they aren't you will be charged with a fee. It is also good to know you are financially able to pay what you bought with it, including interest every time. Having good creditworthiness and capacity. Lastly, it's also good to have a good sense of responsibility with credit cards (character).