Banking And Credit

Unit 5

Section 1: The Basics of Credit

● Credit is when you get a personal loan from a lender to purchase an item or good before

time and make a plan to pay it up in the future.

● The different types of credit are Credit Cards and Personal Loans or Loans.

● To get credit you must pay an additional percentage of interest (APR) to the lender.

● What determines if someone gets credit is based on their creditworthiness which is if they are able to pay back their loan. Lenders know this by the persons Credit score. This information comes from the Credit Bureau, who collects all the information for every persons credit. How much they get to borrow all depends on their Credit score.

Section 2: Vocabulary Watch

Section 2: Vocabulary Watch

Capacity - The maximum amount that something can contain

Credit History - A report of the loans you've taken out and payed.

Credit Bureau- A group or company that keeps consumers credit report or history.

Section 3: Credit Cards: What You Need to Know

● Portable plastic card issued by a bank, business, etc with a Credit limit and interest rate to purchase goods or services on credit

● Where can you use credit cards? You can use the credit cars in supermarkets, online and fast food restaurants as long as the over-the-limit fee has not been reach.

● The benefits of having a credit card is to buy now and pay later. The costs of using a credit card would be The annual fees which you pay to keep the credit card. Another cost would be penalty fees in which means you to pay more when you don't pay on time.

Section 4: Smart Consumers: Don’t Fall Into the Credit Card Trap

A way to save money by using credit cards would be to limit your self with spending and pay your annual fee on time or it can mess up your credit in the future. When using a credit card, you should get comfortable and pay anything and everything with it. If you are to use it only use it for large payments. Credit cards could seem like a good thing to have. It could be a good thing if u know how to use it or are responsible with your payments. Otherwise using a credit card could ruin your credit in so many ways and so you wouldn't be able to purchase large loans or credit in the future for a car or house.

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