General and Core Concepts
The careful use of your credit and close watch of your credit.
What is credit management?
Billy uses this type of loan to purchase a new car.
What is an auto loan?
Megan uses her credit card to purchase a whole new wardrobe after a bad breakup.
The total amount of her spending was 300 dollars over the amount she had in her checking account.
What is DON’T use your credit card for retail therapy?
Sophia checks her credit card statement every month to ensure all transactions are accurate.
What is DO regularly review/check your credit card statements?
The ability to make large purchases that you otherwise would not be able to afford if you were paying in cash.
What is the importance of credit?
An entrepreneur taking out a loan specifically for their upcoming restaurant.
What is a business loan?
Audrey forgets to pay her credit card bill on time and decides to ignore it for another month.
What is DON’T delay/forget about your credit card payments?
Liam pays his credit card bill in full every month to avoid interest charges.
What is DO pay your credit card balance in full?
The three-digit number that determines how financially responsible you are based on your credit history.
What is a credit score?
Vivian is short 20,000 to pay for college, so she takes out a loan to cover her tuition costs.
What is a student loan?
Leo decides to use his credit card to withdraw cash from an ATM because he wants “quick” spending money for the weekend.
What is DON’T use your credit card for cash advances?
Olivia keeps her credit card usage under 30% of her credit limit to maintain a good credit score.
What is DO keep your credit utilization low?
The percentage charged on the amount you owe, also known as the APR.
What is an interest rate?
Scenario:
Katie has 100 dollars in her checking account.
She purchases a 200-dollar concert ticket.
What is using a credit card for personal purchases?
Emily only pays the minimum amount due on her credit card each month, even though she has enough money to pay more.
What is DON’T only pay the minimum balance on your credit card if you can pay more?
Ethan sets up automatic payments for his credit card to ensure he never misses a due date.
What is DO set up automatic payments for your credit card?
Paying on time, keeping balances low, paying more than the minimum, understanding terms and fees and checking reports.
What is responsible credit use?
Jake and Sarah need to renovate their house for $30,000. Instead of taking out a traditional loan, they decide to use the equity in their home to pay for it.
What is a Home Equity Line of Credit (HELOC)?
Alex loves electronics. So, when offered a “once in a lifetime” discount on a new TV, he blindly gives an unverified website his credit card information.
What is DON’T share your credit card information on unverified websites?
Ava makes sure to THOROUGHLY read the fine print of the credit application before signing.
What is DO gather all the information before signing to a credit card?