CREDIT CREDIT CREDIT
The Basics of Credits
What Is This Credit You Speak Of?
Credit is borrowing money from people and not being entitled to pay them back right away. You obtain a credit score for how well you manage your payments and expenses.
Some forms of credit are:
This form of credit lets you borrow money from a lender that must be paid with interest.
With installment credit, you borrow a certain amount of money for a set period of time and you repay the money by making a series of fixed or installment payments. Examples of installment credit include mortgages, car loans, and student loans.
The creditor has approved you for a set amount, your credit limit, and you can access the credit whenever you want and as often as you want. In return, you must pay the creditor at least a minimum amount on your account’s outstanding balance each month. Credit cards and home equity lines of credit are examples of revolving credit.
The creditor guarantees that it will be paid back by putting a lien on an asset you own. The lien entitles the creditor to take the asset if you don’t live up to the terms of your credit agreement. Car loans, mortgages, and home equity loans are common types of secured credit.
When your credit is unsecured, you simply give your word to the creditor that you will repay what you borrow. Credit card, medical, and utilities bills are all examples of unsecured credit.
This form of credit is generally an account that has a balance that is to be paid in full every month. With this, there is usually no pushing your debt over to the next month, no installment payments over long periods of time, and no interest charge. Some uses for this credit are company charge cards, cell phone accounts, and home utilities.
Costs & Benefits
- Immediate Access: Credit can help with an expensive, unexpected emergency and give you the flexibility to pay it over time.
- Low-cost loans: You can use revolving credit to save today, when available cash is a week away.
- Paperwork: You'll need to save your receipts and check them against your statement each month. This is a good way to ensure that you haven't been overcharged.
- Deepening your debt: Consumers are using credit more than ever before. If you charge freely, you may quickly find yourself in over your head--as your balance increases, so do your monthly minimum payments.
Who Can Get Credit?
CREDIT CARDS: What You Need To Know
It is a universal tool given by banks. Unless a business clearly states that they don't accept them, a credit card can also be used almost anywhere.
- Security: Lose cash, and it's gone. Lose a credit card, and it can be cancelled. Also, if you report a lost or stolen card promptly, you're protected against its unauthorized use.
- Record Keeping: Your credit card statement is an itemized list of your monthly expenditures, which can be helpful when it comes to budgeting.
- Convenience: Credit cards are accepted at more places than checks, and they're generally faster to use.
- Bill Consolidation: Bills can be paid automatically via credit card, consolidating several payments into a single lump sum.
- Rewards: Using a credit card with a rewards program may earn you benefits like free travel.
- Instant cash: Cash advances are quick and convenient, putting cash in your hand when you need it.
- Perks: From frequent flier miles to discounts on automobiles, there is a program out there for everyone. Many credit card companies offer incentive programs based on the amount of purchases you make.
- Build positive credit: Controlled use of a credit card can help you establish credit for the first time or rebuild credit if you've had problems in the past--as long as you stay within your means and pay your bills on time.
- Purchase protection: Most credit card companies will handle disputes for you. If a merchant won't take back a defective product, check with your credit card company.
- Balance surfing: Many credit card companies offer low introductory interest rates. These offers allow you to move balances to lower-rate cards.
- Overuse: Revolving credit makes it easy to spend beyond your means.
- High-cost fees: Your purchase will suddenly become much more expensive if you carry a balance or miss a payment.
- Unexpected fees: Typically, you'll pay between 2 and 4 percent just to get the cash advance; also cash advances usually carry high interest rates.
- Homework: It's up to you to make sure you receive proper credit for incorrect or fraudulent charges.
- Teaser rates: Low introductory rates may be an attractive option, but they last only for a limited time. When the teaser rate expires, the interest rate charged on your
Credit Card Comparing
PNC Points Visa
Late Payment- up to $35
Returned Check- up to $35
Balance Transfer- Either $5 or 3% of amount, whichever is greater.
Cash Advance- Either $10 or 4%, whichever amount is greater.
Earn 4 points for every $1 and use those points towards rewards.
Earn 25% bonus points when you maintain a virtual wallet.
Earn 50% bonus points when you maintain a performance checking.
Earn 75% bonus points when you maintain virtual wallet.
BankAmericard Better Balance Rewards
None if I am able to manage my credit card balance
0% for 12 billing cycles and then 12.24%-22.24%.
Late Payment- up to $37
Returned Check- up to $27
Balance Transfer- either $10 or 3% of amount, whichever may be greater.
Cash Advance- either $10, 5%, or 3% of amount, whichever may be greater.
Online shopping security
Tips For Using Credit Wisely
Paying your bills on time can eliminate any possibility of jeopardizing your credit score. It also means you don’t have to pay any late fees.
2. Always get a copy of your credit report.
Getting a copy of your credit report is good to make sure your expenses are all accurate. You should request one once a year or when you are thinking about making a big purchase.
3. Know your credit score.
This can save some time when trying to make big expenses or doing any sort of business with banks. You will be able to know what you can and cannot purchase and if you are at any risk of being denied.
4. Make a monthly budget and stick to it.
Putting together a list of how much you expect to spend and what you actually spend is helpful when wanting to know where your money goes. Budgets are awesome at helping you manage your money.
5. Know how much debt you can handle.
Debt is inevitable. We are all bound to be in debt at some point in our lives, but how much debt is what we can control. Your debt shouldn’t be more than 15% of your monthly take home pay. This will help to ensure that you don’t go deeper into debt.
6. Look around for the best offers and interest rates.
When obtaining a credit card, don’t just go for the first one you apply for. Compare credit cards to see which one can get you the most benefits and the lowest interest rate.
7. Don’t get a credit card just because they’re giving something away.
When banks advertise $200 giveaways for opening up a new account, don’t go for it. Most of the times there will be contracts with high interest rates on the cards and almost no benefits. If you have really researched the background on this certain type of credit card and you like it, then go for it and collect your $200.
8. Use credit only when it is necessary. Don’t use it to buy something you can’t afford.
With credit cards, it’s really tempting to just go out and buy whatever we please. Price is usually often overlooked when purchasing items with a credit card, so only use credit cards to but what you can afford. Because you will regret buying that $300 dress at the end of the month when you have to ACTUALLY pay for it.