Section 1: The Basics of Credit

Credit is the ability to borrow money that eventually needs to be paid. There are different types of credit, for example, credit cards and personal loans. However, credit isn't free because people must pay interest (APR).To be able to recieve credit you must prove your creditworthiness, or the reliability to be able to pay back. To qualify, lenders must judge you using the 3C's of credit; character, capacity, and capital. Once accepted people will receive a credit score, which is a number that represents your creditworthiness. The Credit Bureau will provide you with a record, it is also known as a credit report.

Section 2: Vocabulary Watch

Credit Limit - The maximum amount of credit that a lender can give to a person

Annual Percentage Rate - The interest day of the whole year

Collateral - Something pledged as security for repayment or a loan

Section 3: Credit Cards - What You Need to Know

Plastic card given by a bank that is used to buy goods or services on credit. When a person has possession of a credit card they must pay an annual fee of about $15-$100. A person can not put all of their expenses on the credit card because there is a credit limit, which is the maximum amount of credit that a lender can give to a person. If a person goes over their credit limit, then the person must pay and over-the-limit fee. However, if the money was paid back before the specific day , then there will be no interest rate or more penalty fees added to the money that the person already owes.

Section 4: Smart Consumers - Don't Fall Into the Credit Card Trap

Tips on using Credit Cards:

1. DO NOT give any one your pin number

2. Try to use credit cards for emergencies only

3. Be AWARE of how close you are to the credit limit

4. Pay all the fees on time to avoid paying extra fees

5. Keep all your information secret to prevent identity theft