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Credit education
Credit Education.
The best reasons to use a credit card are for convenience, flexibility, and for the purchase benefits that many new cards offer.
Who's in Charge
Make sure YOU manage your credit card; it shouldn't manage you.
A credit card is like a short-term loan. It's is the most popular form of personal credit, but also the least understood. Although it might seem easy to use — just swipe, right? — there's a right way, and a wrong way, to use a credit card.
The Right Way to Charge It
There is a school of thought that believes that a credit card can be used for all kinds of purchases. However, you could manage your spending better if you charged major expenses on your credit card, as it provides a good indication of your monthly expenses.
Another good way to use your credit card is for purchases that are linked to "offers" or "points" that can be redeemed at a later date.
It is advisable that you use your credit card as a convenient and valuable purchasing tool, rather than as a matter of habit. Remember, your card is meant to be a help, not a hindrance.
C is for Credit
Purchasing power of people vary, therefore most of the time people cannot afford to buy everything they need— much less everything they want — without a little help.
What is Credit?
Credit is an agreement between a lending organization — be it a bank, a store, a credit card company, or others — and a borrower, namely you. That agreement puts money in your hand, in your bank, or on a credit card, for your use. The terms of repayment, including interest charges, are usually preset by the bank.
The various types of credit available to you depend on your financial situation, financial needs, and the lending partner you choose.
Three Types of Credit
Type 1: Personal Loans
Personal loans are a well-known, old-fashioned way to get money. They can make large items like cars and houses a reality. Loans come in a lump sum that must be paid back regularly by a specific date. The longer you take, the more interest you'll pay — one of the basic rules of credit.
Type 2: Lines of Credit
A personal line of credit is similar to a loan — money borrowed for large purchases or expenses. Unlike a loan, it's not a lump sum. Instead, it offers a specified amount of money available for your use. Interest is charged only when it's used. Once you pay off the used portion the interest charges stop, and you can continue to access it.
Type 3: Credit Cards
Credit cards are the most popular and most flexible source of credit available. They are issued by banks and other financial institutions or through stores, gas stations, and various retail outlets. Before you sign up and start spending, learn the difference between a credit card and a charge card.
Difference between a credit card and a charge card.Purchasing power of people vary, therefore most of the time people cannot afford to buy everything they need— much less everything they want — without a little help.
What is Credit?
Credit is an agreement between a lending organization — be it a bank, a store, a credit card company, or others — and a borrower, namely you. That agreement puts money in your hand, in your bank, or on a credit card, for your use. The terms of repayment, including interest charges, are usually preset by the bank. The various types of credit available to you depend on your financial situation, financial needs, and the lending partner you choose.
Three Types of Credit
Type 1: Personal Loans
Personal loans are a well-known, old-fashioned way to get money. They can make large items like cars and houses a reality. Loans come in a lump sum that must be paid back regularly by a specific date. The longer you take, the more interest you'll pay — one of the basic rules of credit.
Type 2: Lines of Credit
A personal line of credit is similar to a loan — money borrowed for large purchases or expenses. Unlike a loan, it's not a lump sum. Instead, it offers a specified amount of money available for your use. Interest is charged only when it's used. Once you pay off the used portion the interest charges stop, and you can continue to access it.
Type 3: Credit Cards
Credit cards are the most popular and most flexible source of credit available. They are issued by banks and other financial institutions or through stores, gas stations, and various retail outlets. Before you sign up and start spending, learn the difference between a credit card and a charge card.
 | Charge cards are often gas and department store cards, plus a few other brand-name cards. They demand that you pay your balance in full each month, and penalties for non-payment can be severe. |
| Credit cards are somewhat more forgiving. They allow a cardholder to carry a balance from month to month. Although it's advised that you pay your complete balance each time you get a bill. |
The best reasons to use a credit card are for convenience, flexibility, and for the purchase benefits that many new cards offer.
Who's in Charge
Make sure YOU manage your credit card; it shouldn't manage you.
A credit card is like a short-term loan. It's is the most popular form of personal credit, but also the least understood. Although it might seem easy to use — just swipe, right? — there's a right way, and a wrong way, to use a credit card.
The Right Way to Charge It
There is a school of thought that believes that a credit card can be used for all kinds of purchases. However, you could manage your spending better if you charged major expenses on your credit card, as it provides a good indication of your monthly expenses.
Another good way to use your credit card is for purchases that are linked to "offers" or "points" that can be redeemed at a later date.
It is advisable that you use your credit card as a convenient and valuable purchasing tool, rather than as a matter of habit. Remember, your card is meant to be a help, not a hindrance.
Sarnath |
Latest page update: made by Sarnath
, Oct 16 2007, 3:33 AM EDT
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stories by vijayaraghavan
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570 words added 3 images added view changes - complete history) |
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