The Basics of Credit

By: Cynthia Solis PD 10

Section 1:

Credit is the ability to obtain stuff before payment, lenders trust that payment will be made in the future. There are three types of credit, secured or unsecured, revolving, or installment. Your credit score is very important. If you have a low credit score you will not be able to get good loans in the future. If you fail to make payments, a credit report gets send to the credit bureau. With credit, you can obtain a credit card and get personal loans. Although those are not free and you typically have to pay interest. Creditworthiness determines how much credit you get or how much you get approved for a loan.

Credit Cards: What You Need to Know

Section 3:

A credit card is a plastic card that's giving to you by a bank, or etc.., to buy stuff on credit. Which means you have to make payments with interest rates. There are annual fees when you have a credit card, this is how the banks make their money. You get a credit limit on how much you can spend to payback. If you go over your credit limit there is a over-the-limit fee. If you are late to make payments there are penalty fees. You can use credit cards pretty much anywhere they are accepted. You can pull out money at ATMs, your bank, or cash back.

Don’t Fall Into the Credit Card Trap

Section 4

When using a credit card, make sure you do not spend more than you can repay. Don't ever share your PIN number with anyone. Also, it is unwise to get a joint account or co-sign with a friend or person your dating. Joint accounts and co-signing are long term commitments and if the person decides to not make payments then your credit score will lower if you do know pay.