Using Credit

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What is credit?

Back

The ability to borrow money from someone else with the agreement to pay it back later

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Who lends credit?

Back

Creditors, also known as lenders, persons, businesses, and service providers.

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What is a debtor?

Back

A person who borrows money from others.

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What must you first do to use credit?

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Qualify for credit

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What could happen if you are spending more than you are making?

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You could bring on a lot of debt.

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What is capital wealth?

Back

The form of money or other assets owned by a person after deducting debts.

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What is one of the advantages of using credit?

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It is ideal for purchasing goods and services.

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Which of the following is a disadvantage of using credit? It helps build your credit score., It is safer to carry around than large sums of cash., Credit can cause financial issues if used poorly due to overspending., It helps in emergencies when you may need money that you don't have.

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Credit can cause financial issues if used poorly due to overspending.

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What is Revolving Credit?

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Credit that you can borrow on an ongoing basis with interest rates, a spending limit, and monthly payments.

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Which of the following is an example of Open Credit? Mortgage, Car loan, Cell phone bill, Student loan

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Cell phone bill