The basics of credit
What is credit?
The ability to obtain goods or services before payment, based on the trust that payment will be made in the future: "unlimited credit".
What are the forms of credit?
What costs are associated with credit?
What determines if someone gets credit and how much they get?
What is a Credit Card?
A credit is issued by the bank to purchase goods or services on credit.
When you get a credit card you are required an annual fee you must pay, it ranges from $15-$100. Credit cards also have interest. You have to pay the entire money by a due date in order to not get any interest on your account, and not have to pay more money than what you are supposed to pay. There is also a credit limit which is the maximum amount of money you can spend using your card. If you go over-limit you will need to pay an extra amount of money. Penalty fees are fees due to late payment and can increase your interest rate.
Tips when using credit cards.
- Understand the terms of the card.
- Set a budget
- Pay on time.
- Pay in full.
- Don't go over the limit.
- Never lend your card to anyone.