Basics of Credit

Avram Ivanov 7/8

Basic Questions

  • What is Credit?
Basically what a credit is it allows you to borrow money and then pay them later in other words its a lender. But in order for that to hapen you would need a good credit score and to have a good credit score or you need to make sure you take care of Credit Bureau which is paying your loans on time.

  • What are the forms of credit
There is 3 forms of credit (creditworthiness)

  1. Character- Being responsible and aware of what you need to pay to keep your credit score high
  2. Capacity- Having the financial ability to repay your loan just in case
  3. Capital- Value of what you own, so you can use it to pay a loan
  • What costs are associated with credit?
Their are many costs associate with credit like you need to make sure you pay your personal loans on time to keep good credit score and you also need to pay APR because it is required if you want to have a credit card. If you don't pay your loans on time your credit score will drop and that can cause you to go broke and it will be really hard to repair the damage.

  • What determines if someone gets credit and how much they get?
The things that determine for someone to get a credit is you paying your bills on time and if you pay your bills on time you will have a good credit score which will also determine how much money you can spend.

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Vocabulary Watch

To have a good Credit you must follow some steps. One of this steps is bringing your credit score up. One way you can do that is by checking your credit bureau to make sure you are paying your personal loans on time. Another way to make sure you get a good credit score is by not over using your credit card. If you over use your credit card it can add up to a lot of money which you will not be able to pay for and will cause you to go broke. This are the basics steps you need to follow in order to achieve a good credit score which will help you a lot when you need money.

What You Need To Know About Credit Cards

  • What is a credit card?
Plastic card issued by the bank for purchase of goods and services

  • Where can you use a credit card?
You can use them for online shopping, and market stores for groceries and electronics.

  • What is the benefits and costs of using a credit card?
The benefits of using a credit cards are you can purchase more goods and it opens the door for more job opportunities for people. The benefits of using a credit card are the fees like Annual fees, APR, penalty fees, credit limit, and over the limit fee. Annual limit fee normally costs from $15-$120 the APR is from 0-29%, the penalty fee is when you get charge for a late payment, credit limit you get charged approximately $30 for each charge, and over the limit fee is when you go over your limit that you were suppose to spend.




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Tips For Using A Credit Card

When you use a credit card there is things you must watch out for. Things like over using your credit card which is a mistake that a lot of young people make because they never used a credit card before. Over using your credit card will have many negative impacts on you. For example you will fall into a heavy debt. When you fall into a heavy depth because of over using a credit card it is really hard to get out of. Also costs you not to be able to spend no more money on goods which will really suck because you wont be able to enjoy yourself as much. Now that you know this make sure you never over use your credit card because it can lead you into many trouble which can be avoided just by making sure you are not overusing your credit card!
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