Uses and Costs of Credit

Front

What is the difference between cash and credit?

Back

Cash is money you have immediately to use, while credit is when you have to borrow money and pay it back to someone.

Front

Why would someone need to use credit?

Back

When there is not enough cash to pay for an immediate need or want.

Front

When you use a credit card, what are you really doing?

Back

You are borrowing money from a bank or business.

Front

When you borrow money, you are expected to pay the money back plus additional money. What is that additional money called?

Back

Interest

Front

Why should you pay a loan back quickly?

Back

You will owe less interest.

Front

If you do not pay your entire credit card bill when you get your statement, you will have to pay back the debt with interest.

Back

True