What is Credit?

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annual fee

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A yearly cost charged by a credit card company for use of your card

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loan

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Money borrowed to pay for a large purchase like a car or home

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credit

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A way of buying something if you do not have the money for it

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Minimum Payment

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Smallest amount you can pay on a credit card bill

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Interest Rate

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A percentage of an unpaid bill added to your account

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Contract

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Written agreement outlining the terms of a loan

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Retail

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Many big stores have their own credit cards that use this type of credit; can only be used in their stores to make purchases

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Balance

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Amount owed to a lender or credit card company

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Major Credit Cards

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Big companies such as Mastercard and Visa provide this type of credit that can be used almost anywhere

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Credit Limit

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The total amount you are approved to charge on a credit card