Cassidy Cichon

Section 1


The is the ability to borrow $$ in return for a promise of future payments aka “Buy Now…Pay Later”

Forms of Credit

Loan (personal loan)

  • House
  • Car
  • School

Credit card

Costs associated with credit

Interest (APR)

  • annual % rate

What Determines if you can get credit and how much you can get

Credit Score

  • Score between 300 & 850 (aka FICO score)
  • The higher, the better

Credit Bureau

  • Collects info on consumers’ credit like..
  • Bounced a check
  • Missed a rent payment
  • Been sued
  • Bankruptcy

Credit Report

  • a negative record of an individual's or company's past borrowing and repaying, including information about late payments and bankruptcy


  • Your reliability to pay back a loan


  • judge this using 3 factors…
  • Character
  • Capacity
  • Capital

Section 2


To get credit you must demonstrate creditworthiness. Which is your reliability to pay back a loan. You do this because Lenders judge this using 3 factors character,capacity, and capital. Character is sense of financial responsibility, dependability, a steady job, and a long term residence. Capacity is financial ability to repay loan, have high enough income, and major expenses & debt. The last part is capital which is the value of what you own, savings, investments, and property. It is used to pay loan if needed.

Section 3

What is a Credit Card

Regular charge accounts

  • Must pay balance in full
  • Ex. American Express

Revolving charge accounts

  • Can carry balance from month to mont
  • Ex. Visa, Mastercard

Where can you use a credit card

You can use a credit card in many different places for pretty much anything.

as long as you know your credit limit

  • Max amount you can spend using card
  • Over limit = penalty fee or declined
  • Approx $30 for each charge made beyond limit

Benifits and costs of using a credit card


  • Going over credit limit

Late Fee

  • Making payment late

Penalty Fees

  • Additional fee due to late payment, over credit limit, returned payment, etc.
  • Could also result in an increase in interest rate

Section 4

Ways to be safe while using a credit card

  • Consider a loan as opposed to using a credit card
  • Interest rate may be lower

• Pay credit card balance in full

  • Avoid minimum payment trap

• Choose card wisely

  • Least expensive; greatest benefits

• Other tips:

  • Avoid too many cards, pay cash, don’t miss payments, read what you sign,

avoid identity theft, seek credit counseling if needed, beware of bankruptcy