A How To Guide

What Is Credit?

Credit is the trust that when you borrow money, you will pay it back. This is also called a loan. You build your credit score by paying back your loan either early or on time. If you are not granted credit, it is because there is no trust that you will pay back your loan.

What Are Some Different Types Of Credit?

  • Credit Cards- a plastic card issued to you by a bank or business, allows you to borrow money with the trust that you will pay it back
  • Loans- an amount of money that is borrowed with the intent of paying it back by interest
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What Are The Costs And Benefits Of Credit?


  • Interest
  • Fees


  • Shop online
  • Buy gas
  • Travel benefits

What Is Creditworthiness?

Creditworthiness means that you have a good credit score and you are applicable for credit cards and personal loans. When applying for these, the lender will take your creditworthiness into consideration.

Important Vocabulary

Credit Score- a number given to a person that tells the lenders their ability to pay back a loan.

Credit Report- a report of a person's credit history made by the Credit Bureau to be given to a lender.

Credit Bureau- a company that collects everyone's credit information and makes individual reports for each person.

Credit Cards: What You Need To Know

What Is A Credit Card?

A credit card is a plastic card issued to you by a bank or business. It allows you to borrow money with the trust that you will pay it back. If you don't pay back your credit company, they could raise your interest on the card and hit you with a lot of different fees.

Where Can You Use Credit Cards?

You can use credit cards just about anywhere, just make sure the place you want to use it at accepts the type of credit card you got. Certain stores or restaurants don't accept credit cards from specific companies. It always a good idea to check and see if they will accept your card before you try shopping at certain stores or eating out.

Tip: Use your credit card when shopping online. It builds credit and if the purchase turns out to be a scam, the person or company that has your card info won't be dipping into your personal bank account.

What Are The Benefits And Costs Of Using A Credit Card?


  • Travel rewards
  • Hotel rewards
  • Account protection
  • "Limitless money"


  • Interest - a percentage you pay with each credit card bill
  • Annual fees - a yearly fee for owning a credit card
  • Penalty fees - late payment fee, over-the-limit fee, etc.

An over-the-limit fee is a fee that is applicable to you when you spend more than your credit limit per month.

Smart Consumers: Don't Fall Into The Credit Card Trap


  • Have at least one credit card in your life
  • Pay back your card as soon as possible
  • Try to pay more than your minimum amount when paying back your fee, this will help you get it paid off faster
  • Use it for emergencies only
  • It's easy to abuse a credit card, try to limit yourself much lower than the credit limit that is placed on you
  • Don't fall behind on your payments, debt will catch up to you quickly