2
DAY, MONTH 00, 2015 |
Sponsored Newspapers In Education Content
What is credit?
Credit allows you to make a purchase now, and pay later. Credit is especially useful when making a big purchase like a car or a house. There are two
types of credit; revolving and installment credit. Revolving credit is credit that renews when debts are paid. Credit cards are an example of revolving
credit; once you pay your monthly bill your credit limit is renewed. Installment credit is debt you pay back over time, such as a mortgage or auto loan.
TYPES OF CREDIT
Credit comes in several forms:
Credit cards
Mortgage and auto loans
Personal loans
Retail accounts
CREDIT VS DEBIT
DEBIT CARDS
CREDIT CARDS
Linked to a checking or savings account; they have no
fees unless the user overdraws the account.
Credit cards are like taking out a loan, the user is approved
for a certain amount; many cards come with annual fees in
addition to interest on the credit used.
Funds are removed from the account as soon as the
card is swiped.
Users pay their bill once a month and must make at least
the minimum payment, if not paying the full amount due.
Depending on how your card is set up, you can either
only spend as much as is in your bank account or you
can overdraw your account, resulting in fees.
User can spend up to the credit limit amount they are
approved for by the lender.
Do not build credit.
When used properly, can help build a strong credit score.
If funds are taken fraudulently, they may not be fully
insured, and it could take time to be reimbursed, leaving
you with an empty checking account in the meantime.
Funds are usually insured, in most cases you are not
liable for fraudulent charges if caught within the initial
billing period.
Go to
bankrate.com
or
depositaccounts.com
to have your students
compare loan rates,
credit card offers, etc.
TEACHERS
CREDIT
