Martin Ramirez 7/8

Section 1

What is Credit?

  • Credit is the ability to borrow money in return for a promise of future payment in return. Credit is not free it involves interest.
What are the forms of Credit?
  • There are different forms of credit such as a credit card or loans that you get to purchase a car , house , or to help pay for school.
What Cost are associated with Credit?
  • The cost that comes with credit is the interest cost. The interest cost is a certain percentage annually.
What determines if someone gets credit and how much they get?
  • Something that determines whether someone should get credit and how much they should get is their credit worthiness. Credit worthiness is your reliability to pay back a loan.
  • Lenders determine your credit worthiness by looking into three things . These things are your character, capacity, and capital. This info comes from the credit bureau when you apply for personal loans.
  • Credit bureau determines your credit score. The score can be between 300 and 850, the higher the score the better.

Section 2

Section 2

Section 3

What is a Credit Card?

A credit card is something you get from your bank that allows you to make purchases building credit instead of using cash. A credit card is not free money it works on a buy now pay later way. A credit Card is not free it comes with annual fees.

Where can you use Credit Cards?

You can basically use credit cards anywhere. You can use them to make small everyday purchases or for a "loan" . Although you can use credit cards almost anywhere they do have a limit on the amount of money you can use from it. If you go over the limit there will be a penalty for it which will be an over-the-limit fee. The over-the-limit fee will go up on an interest rate.

What are the benefits and Cost of using a Credit Card?

The benefit of using a Credit Card is being able to start your credit, you don't need to pay with cash . Credit allows customers to purchase more goods, more goods purchased equals more jobs , people with jobs can purchase more goods . Basically its a cycle that works for people and the economy. Even though this does seem like a good thing there is a cost to using this a Credit Card such as people over use credit cards falling into debt , then you can no longer purchase goods or get a loan becuase your credit is ruined. So people purchase less goods lowering employment.

Section 4

When you use a Credit Card the best way to stay safe is to make all your payments on time. By making all the payments on time you avoid the late fee charges and you don't have to pay an interest rate. Another good thing about making all payments on time is that your credit does not go down and you don't start going into debt. You should also stay below the limit on your credit card. The best way to avoid going over the limit is to only use your credit card for emergencies do not go out and start purchasing goods on your credit card just because you can.