We’ve all heard of credit cards. But how does it all work?
Credit is the ability to obtain cash, goods, and services now while paying for them in the future. But credit is not free money. In fact, there is a real cost associated with burrowing that money, and that cost is interest.
Let’s give you an example…
John Dough wants a new sound system, but it costs $500 (a little out of his price range!) Instead of saving up the money, John opens a credit card account at the store, so that he can buy and take home the stereo today. John is so excited, he barley notices that he’ll be charged a 21.0% interest rate. Here’s what would happen if John only made the minimum payment of $10 each month.
If John continued to make only the minimum payment, he would have made payments for 52 months and would have spent $697 for the $500 sound system!
Want to know more about YOUR credit history?
Your credit history is a vital part of the credit review process. It can affect all aspects of your life - such as buying a car, renting an apartment, even getting a cell phone!
You can check your credit history by contacting one of these three major national credit reporting bureaus:
What to learn more? Click here for a schedule of upcoming classes in the Quincy area!
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