1. Using Credit Wisely

2. Credit  Credit is a sum of money a person can use before having to reimburse the credit lender.  It allows a person to receive a good or service now but pay for it later.  When you use credit, you are really taking out a loan.

3. Advantages of Credit  Credit is a convenience.  You do not have to carry large amount of cash  Credit allows you to use goods and service while paying for them  Credit helps you meet financial emergencies  Credit Rating: a person’s reputation for paying bills on time

4. Disadvantages of Credit  Credit encourages impulse buying  Credit can get you into serious debt  Credit makes the cost of goods and services higher  Credit ties up your future income

5. Types of Credit 1.Credit Cards 2.Installment Loans: loans that you agree to make monthly payments in specific amounts over a period of time 3.Charge Accounts

6. Paying for Credit

7. Before you take out a loan or apply for a credit card, you should figure out the costs to see if you can afford it. Different cards have different interest rates. There are also different types of fees.

8. What to look for:  Annual Percentage Rate (APR): this percentage rate determines your cost on a yearly basis.  Finance Charges: total amount it costs to finance the loan (interest charges)  Fees: annual fees, late payment fees