Using Credit - What to Know

How do credit cards work?

• You lend money to the bank to buy something.

• Someone lends you money to buy something.

• You pay the store directly for your purchases.

• You use your own money to buy something.

How do you get a credit card?

• You can only get a credit card if you have a perfect credit history.

• You automatically receive a credit card when you open a bank account.

• You can get a credit card without any application process.

• You must apply and get approved by a credit card company.

What should you consider when comparing credit cards?

• The popularity of the credit card company.

• The color and design of the card.

• The annual fee, APR, other fees, and grace period.

• The credit limit and credit history requirements.

What is a secured credit card?

• A credit card that can only be used for online purchases.

• A credit card that requires a high credit score to qualify.

• A credit card that is linked to your savings account.

• A credit card that offers cashback rewards.

How do secured credit cards work?

• You can spend any amount you want without any limit.

• You can only spend the amount you have deposited as collateral.

• You can spend up to double the amount you have deposited.

• You can spend up to triple the amount you have deposited.

What should you consider when choosing a secured card?

• The color and design of the card.

• The application fee and interest rate.

• The credit limit and credit history requirements.

• The popularity of the credit card company.

How should you use your credit card to improve your credit history?

• Use it frequently and max out your credit limit.

• Leave a balance on your card and pay interest.

• Pay only the minimum payment every month.

• Pay the whole credit card bill every month.

How do loans work?

• You lend money to someone and they pay you back with interest.

• You borrow money and never have to pay it back.

• You borrow money and pay it back with interest over time.

• You lend money to the bank and earn interest over time.

Where can you get a loan?

• From banks, credit unions, and sometimes stores.

• Only from banks and credit unions.

• Only from payday lenders and pawn shops.

• Only from online loan companies.

What are some alternatives if you can't get a loan?

• Borrowing money from friends or family.

• Using a payday lender or pawning items.

• Using a credit card or getting a store loan.

• All of the above.