By: Chris Pivaral
Credit is the ability to borrow money in return for a promise of future payment. There are 2 forms of Credit: there's credit that you earn from Credit Cards and there's credit that you earn from Personal Loans from Lenders. There are many costs that associate with credit. You may have penalty fees for going over the limit, late payments, returned payments, etc.. All this may result in an increase in Interest Rate. To start building up credit you need to have a credit card just one. If you pay all of your payments on time you start building up your Credit Score. The Credit Bureau will send you a Credit Report and from that you determine your Creditworthiness.
What is it?
A Credit card is a card issued by the bank and they lend you money and in return you have to pay them back at the end of every month.You can use Credit cards almost anywhere. Some benefits are that you can buy anything that you want but at the end of the month you have to pay them back. Credit card has many Penalty fees like if you go Over the limit you will receive a fee. A Credit Limit when you can only spend a certain amount on the credit card.
What costs are associated with credit?
There are many costs that associate with credit. You may have penalty fees for going over the limit, late payments, returned payments, etc.. All this may result in an increase in Interest Rate.