Credit Newsletter

What you need to know about credit

The Basics of Credit

Credit: ability of a customer to obtain goods/services before payment; this is based on trust that the customer will pay back the money plus interest.


Credit comes in all shapes and sizes. Credit can come as student loans, credit cards, and personal loans.


Set up fees for credit cards are usually paid. Other fees include penalty APR, late payment, balance transfer, and returned payment.


A person with a good credit score can get more loan money than someone with a low credit score. Credit scores are also creditworthiness.


A credit bureau collects your credit information and makes it available to credit card companies and other financial institutions.


Credit rating agencies assign credit ratings. A credit report shows your credit score, your borrowed loans, and your paid loans.


A lender will let you borrow their money on the promise that you will pay it back in full plus interest. Lenders give loans to people with good credit, they deny people with bad credit.

Credit Vocabulary

These are some vocabulary words you should know involving credit:



  • Credit card: a plastic card issued by a bank or business that allows the owner to purchase goods or services on the promise that they will pay the amount and interest back.
  • APR: annual percentage rate; percent interest on loans or credit.
  • Credit History: credit report; shows credit score, loans, and paid back loans.
  • Credit Limit: maximum amount of credit a lender will give to someone in debt.

Credit cards: What You Need to Know

What is a credit card?: A credit card is a plastic card that can be used to make purchases on goods or services that will be paid back with interest. Credit cards have a credit limit on them, meaning there is only so much credit you can use on that one card. A credit card also has annual fees.


Where can you use credit cards?: You can use a credit card wherever as long as there is a credit card swiper.


What are the benefits and costs of using credit cards?: Credit cards are beneficial when you don't have cash or checks on you and you need a fast way to pay for something. The disadvantages to using a credit card are that there are fees if you misuse it. There is a penalty fee and an over-the-limit fee. Another disadvantage to having a credit card is that there is an APR on loans or credit.

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

Here are some helpful tips to keeping good credit and staying safe with a credit card:



  • make a budget and stick to it
  • try to keep your credit score between 650 and 850
  • try not to take out a lot of loans
  • pay your credit card on time
  • if you are over budget, get rid of unnecessary spending