1. Credit vs. Debit
What is Credit?

2. Credit
the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
an entry recording a sum received, listed on the right-hand side or column of an account.
From google

3. Credit Cards
A credit card essentially provides a short-term loan. Here's how it works:
You make a purchase and borrow money from the credit card issuer to pay for it. You have to pay back the money you've borrowed.
The credit card issuer sends you a bill once a month, listing all your purchases and showing how much you owe.

4. Credit Cards
If you pay your balance in full by the due date, you are not charged any interest (unless you have taken cash advances).
If you do not pay the balance in full by the due date, you will incur interest charges, which may be high.

5. Debit Cards
Debit Cards withdraw money that you already have in your bank account.
You are not borrowing money

6. Grace Period
a period of time (usually 21 days) during which, if you pay your full balance by the due date, you are not charged interest on new credit card purchases

7. Cash Advances
A credit card can also be used to withdraw a cash advance.
The interest rate on advances is much higher than the rate for some other types of loans, and there is no grace period—interest is charged from the time you take out the cash advance until the time you repay the advance in full.
best to use cash advances for short-term or emergency situations only.

8. Credit Limit Maximum amount you can charge on the card at one time
If you have no credit history or a short credit history, you will start with a low credit limit
You can increase your credit limit if you prove that you have a good credit history

9. Advantages of Credit Able to buy needed items now
Don’t have to carry cash
Creates a record of purchases
More convenient than writing checks
Consolidates bills into one payment

10. Disadvantages of Credit
Interest (higher cost of items)
May require additional fees
Financial difficulties may arise if one loses track of how much has been spent each month
Increased impulse buying may occur

11. The Three Cs
Character
Capital
Capacity

12. Character – Will You Repay the Debt?
From your credit history, does it look like you possess the honesty and reliability to pay credit debts?
Have you used credit before?
Do you pay your bills on time?
Do you have a good credit report?
Can you provide character references?
How long have you lived at your present address?
How long have you been at your present job?

13. Capital – What If You Don’t Repay the Debt?
Do you have any valuable assets such as real estate, savings, or investments that could be used to repay credit debts if income is unavailable?
What property do you own that can secure the loan?
Do you have a savings account?
Do you have investments to use as collateral?

14. Capacity – Can You Repay the Debt?
Have you been working regularly in an occupation that is likely to provide enough income to support your credit use?
Do you have a steady job? What is your salary?
How many other loan payments do you have?
What are your current living expenses? What are your current debts?
How many dependents do you have?

15. Your Responsibilities
Borrow only what you can repay.
Read and understand the credit contract.
Pay debts promptly.
Notify creditor if you cannot meet payments.
Report lost or stolen credit cards promptly.
Never give your card number over the phone unless you initiated the call or are certain of the caller’s identity.

16. Your Rights Credit cardholders are entitled to protections:
Zero liability means you are not responsible for fraudulent charges when you report them promptly.
In some cases, you have the right to dispute purchases with merchants for unsatisfactory products or services.

17. Credit Scores
When you apply for credit, lenders determine your credit risk by examining your credit scores, also known as FICO® scores (calculated with software developed by Fair Issac and Company)
TransUnion and Equifax are two main credit bureaus keep your credit information
includes your payment history, the amount of money you owe, the length of your credit history, and the number of recently opened credit accounts.

18. Credit Scores
Your FICO scores guide lenders as to what your credit risk is. Scores range from 300 to 850. The higher your score, the lower your perceived risk to a lender.

19. Building a Good Credit History
Complete credit applications carefully and accurately.
Use your credit cards responsibly and don’t let them reach their limit or spend beyond your means.
Attempt to pay your credit card balance in full each month, but at least make the minimum payment by the due date.

20. Building a Good Credit History
Always pay bills on time.
Paying your bills and loans on time, and as promptly as possible.
Only borrowing what you need and what you can afford to pay back.
Avoiding prolonged "easy terms" and having to refinance at higher interest rates. (from section 5.2b)

21. Building a Good Credit History
If you have problems paying your bills, contact your creditors. In many cases, they will work with you to figure out a payment plan.
If you move, let your creditors know your new address as soon as possible to avoid losing bills or receiving them late.
If your credit card is lost or stolen, report it immediately.

22. Building a Good Credit History
Review your credit reports periodically for accuracy and report any errors immediately.
Establish a consistent work history.
Never sign a blank form. Remember, a contract is a legal document. Always read and understand the fine print.

23. Correcting Mistakes and Repairing Credit Rating
If you find inaccuracies or incomplete material on your report, you can register a request that they be corrected.
The credit bureau is obliged to review your complaints. It must either support its claim, correct the error, make the information complete or delete it from your file.

24. Correcting Mistakes and Repairing Credit Rating
the onus is on you to supply the materials that support your argument, including any receipts and documents that back up your claim.
A statement documenting your displeasure with some aspect of your report will be recorded with your file.