why should you get a credit card?

conquering credit & credit cards

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why should you get a credit card?

conquering credit & credit cards

Credit cards are important for a variety of reasons. But why do you need one in the first place? It starts with building credit. Let’s break down the basics.

what's in this lesson?

Credit cards are important for a variety of reasons. But why do you need one in the first place? It starts with building credit. Let’s break down the basics.

overview

Why is a credit card important?

 

Credit cards are important because they help you build credit. And you need good credit for a handful of essential things in life – from buying/leasing a car, to getting a mortgage on a home, leasing an apartment, and more.

 

What is credit?

 

Credit is basically borrowing money from a lender. The expectation with credit is that you’ll pay it back. If you don’t, you can be penalized. Penalties can range from lowering your credit score, to paying fees, and more. Most credit cards are issued by banks, meaning banks would be the lender in that scenario.

 

Building credit (i.e. increasing your credit score) is important and it takes time. Good credit can literally make or break whether or not you’re able to get a lot of necessary things in life, like buying/leasing a car, getting. a mortgage on a home, leasing an apartment, lowering insurance premiums, and more. So, starting as early as you can with building your credit is very important.

 

How do credit cards work?

 

Here are the top line details:

 

  • With credit cards, every time you buy something, it counts toward what you are borrowing from the bank/lender.
  • You have to pay back what you borrowed each month, or you’ll get penalized. Penalties typically are reflected as fees and interest (aka APR), but, if you get penalized too many times, you can have your credit card shut down.
  • You have a “credit limit,” which is the maximum amount you can spend or “borrow” each month.
  • If you continue to pay off your credit card bill in a timely fashion and manage your credit well (more on this in later lessons), your credit will improve and your credit score will go up. This is good! You want your credit to be as good as it possibly can be.

Stick around for the rest of this course, we’ll teach you about what credit cards might be best for you, the difference between credit and debit, and much more!

overview

Why is a credit card important?

 

Credit cards are important because they help you build credit. And you need good credit for a handful of essential things in life – from buying/leasing a car, to getting a mortgage on a home, leasing an apartment, and more.

 

What is credit?

 

Credit is basically borrowing money from a lender. The expectation with credit is that you’ll pay it back. If you don’t, you can be penalized. Penalties can range from lowering your credit score, to paying fees, and more. Most credit cards are issued by banks, meaning banks would be the lender in that scenario.

 

Building credit (i.e. increasing your credit score) is important and it takes time. Good credit can literally make or break whether or not you’re able to get a lot of necessary things in life, like buying/leasing a car, getting. a mortgage on a home, leasing an apartment, lowering insurance premiums, and more. So, starting as early as you can with building your credit is very important.

 

How do credit cards work?

 

Here are the top line details:

 

  • With credit cards, every time you buy something, it counts toward what you are borrowing from the bank/lender.
  • You have to pay back what you borrowed each month, or you’ll get penalized. Penalties typically are reflected as fees and interest (aka APR), but, if you get penalized too many times, you can have your credit card shut down.
  • You have a “credit limit,” which is the maximum amount you can spend or “borrow” each month.
  • If you continue to pay off your credit card bill in a timely fashion and manage your credit well (more on this in later lessons), your credit will improve and your credit score will go up. This is good! You want your credit to be as good as it possibly can be.

Stick around for the rest of this course, we’ll teach you about what credit cards might be best for you, the difference between credit and debit, and much more!

Lessons in this course:

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