The Basics of Credit
makes buying big purchases possible but you have to pay it off
- It's NOT free money
- you can get one free credit report per year
- 3 sites where you can get one free credit report: equifax, experian,transunion
What are the forms of credit?
home loans, student loans, credit card loans
- low limit credit card =limit how much you can own
- Personal loans are usually unsecured and based on the borrower
What costs are associated with credit?
Credit can help you buy anything you want such as clothing, a new car, furniture etc. faster than you can do saving up money.
What determines if someone gets credit and how much they get?
the four C’s: character= find out if you’re trustworthy, credit worthiness, collateral and credit history.
- your interest will tell you how much you can borrow
- Lending institutions can also get your information through a credit bureau
- Credit Worthiness- A measure of your reliability to repay a loan. You must have the ability and willingness to pay your debts.
- Credit- The ability to obtain goods or services before payment, based on the trust that payment will be made in the future.
- Lender- A person that lends money to people
Credit Cards: What you need to know
A plastic card issued by a bank, business, etc., for the purchase of goods or services on credits.
- You have credit limits and you never want to exceed that amount.
- When using a credit card you must make up annual fees, penalty fees, and over-the-limit fees
Where can you use credit cards?
you can use credit cards in a capital, in many stores and anywhere where they accept credit cards.
What are the benefits and costs of using credit cards?
Your interest rate does tell u how much you can borrow so you wont have to worry about spending too much on your credit card.
Smart Consumers: Don’t Fall Into the Credit Card Trap
- sign your credit card right away
- don’t share account information
- always use a secure browser
- be careful with internet connections
- pay more than the minimum balance
- don’t max out on your credit card
- only use it for necessities
- ALWAYS pay on time