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Basics of Credit

What is credit? The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future

What are the forms of credit? home loans, student loans, secure or prepaid (you pay before you buy something), low limit, student credit card.

What costs are associated with credit? you're giving up the ability to to spend money in the future in order to spend now because you must pay interest in borrow money

What determines if someone gets credit and how much they get? The lender asks a credit bureau to check your character (want to know you), Capacity (how stable is your job), collateral (what do you have that they can't take), and creditworthiness (they look at your history like your credit score and your credit report and that you don't have paid any APR


Lender- An organization or person that lends money

Credit Bureau- company that collects information relating to the credit ratings of individuals

Personal Loans- a loan that establishes consumer credit that is granted for personal use

APR- yearly cost for the money that you borrowed

Credit Cards

What is a credit card? A small plastic card issued by a bank that makes it easier to pay for goods without carrying cash, there are many types of credit cards like student credit cards, low limit (that has a credit limit so you don't overspend and you don't get over-the-limit-fees),

Where can you use credit cards? you can use credit cards everywhere and to buy almost everything, but you should be careful of the fees

What are the benefits and costs of using credit cards? some benefits about having a credit card is that you can buy things online and it is quick, some costs about having a credit card are the fees like the annual fees, over-the-limit-fee, penalty fees, and the APR

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Protect your identity
Sign your card when you get it
Put CID in the back of you credit card
Be careful with wireless conections
Pay more than the minimum balance
Don’t max out
Keep track of what you charge
Pay on time