Section 1: The Basics of Credit
Credit is the ability to borrow money in return for a promise of future payment. Which is called a personal loans that you get from a bank; a lender gives you the money. Also the bank charges you interest for borrowing that money. But before all that, the bank has to check your credit score/credit worthiness to see if you are aligable for a loan. You are able to get that loan in cash or in a credit card.
Section 2: Vocabulary Watch
three very important words you should know about credit are credit score, loans, and interest. Credit score is very important when trying to get a loan from the bank. your credit score visualizes you to see if you are capable of paying back the bank. Loans is money given to you buy the bank. You can use that money for important things you need to pay off if you don't have the money. Interest is the amount of percent given by the ban after giving you a loan. What that means is that you will have to pay the bank back the money that you borrowed plus the interest they gave you.
Section 3: Credit Cards: What You Need to Know
A Credit Cars is a small plastic card issued by a bank, business, allowing the holder to purchase goods or services on credit. You can use credit cards in every store you go to. Its a very easy way of paying. When getting a credit card, they charge you an interest rate on your credit card. And also every month you get annual fee which shows how much you have spent. If you don't pay for your interest rate then you get a penalty fee. By spending more money than you have on your credit card, is called over-the-limit fee.
4: Smart Consumers: Don’t Fall Into the Credit Card Trap
When using a credit card it is smart to not over spend. Because if you do, you will be in debt. And if you cant pay that debt you can lose everything you own. Or to be even smarter don't get a credit card, because then you won't have things to worry about. So you should be smart when purchasing a credit card and not make bad choices.