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:

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?

The credit bureau determines someone’s credit based on whether the person pays bills on time, how much debt he or she has, the length of his or her credit history, how many new accounts the person has, and the diversity of the credit accounts. This criteria helps determine someone’s creditworthiness and if they qualify for higher limits and better rates on loans.

CREDIT CARDS: What You Need To Know

A credit card allows you to borrow money from your bank to make your purchases. As long as you pay back the money you borrowed within the “grace period” of 25-30 days, you don’t have to pay extra. If you don’t pay it back in that time period, you’ll have to pay interest, a percentage of the money you owe the bank, on top of what you borrowed or also penalty fees. You are also limited to how much you can spend on a single card. If you go over limit there will also be a fee.


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.

Advantages


  • 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.

Disadvantages


  • 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

Annual Fee

None


APR

12.24%-22.24%


Grace Period

None


Other Fees:

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.


Benefits/Special Features/Rewards/Services

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

Annual Fee

None if I am able to manage my credit card balance


APR

0% for 12 billing cycles and then 12.24%-22.24%.


Grace Period

None


Other Fees:

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.


Benefits/Special Features/Rewards/Services

Online banking

Online shopping security

Digital wallet

Account alerts

Chip cards

Text banking

Tips For Using Credit Wisely

1. Pay your bills on time and in full amounts.
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.