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Take Action! Good Practices for Credit Card Use Credit is the ability to borrow money from
Here are some good tips to follow that will help someone else and pay it back later. With credit Financial
you manage your credit and avoid common Literacy
I will avoid using my credit card problems: we can purchase homes, cars, and other goods
for cash advances and services. Credit offers the convenience of No. 4
Pay off credit card balances every month buying something immediately, and then paying
I will work to pay my credit card it back right away, or a little at a time over a
balance in full each month Have one credit card dedicated to online
purchases - this limits your risk of identity longer period. We pay for the privilege of having credit by paying additional
I will include credit card theft and fraud. money to the lender, called interest. The interest rate is the percentage of
payments in my monthly budget. funds paid to the lender.
Pay at least the minimum amount required
©2017 Learnovation®, LLC
by the due date to avoid a late fee. As you begin to use credit, you build your credit history. When you pay your bills
on time, and pay back what you owe, you build your financial power. A credit
Stay under your credit limit to avoid an
Watch Out for Credit Traps card is one of the first ways people begin to establish credit. A credit account
over-limit fee.
Good credit can help you Pre-paid cards keep you from spending is issued by a bank or other financial organization, allowing you to borrow up to
build financial power, but when money you don’t have. a set amount of money, called your credit limit. A purchase made on credit is
For Evaluation Only
misused, credit can also turn into a essentially a loan made to you by the card issuer. You are issued a plastic card
nightmare, feeling like you can never pay Try to keep 50% or more of your credit which is used to make purchases.
off what you owe. Avoid these common limit available Types of Credit Cards Credit Cards
mistakes: Some credit cards can only be used in certain department stores or gas
stations
Charging up to your credit limit Build Your Credit History Banks and other financial providers issue their own cards including Visa®,
because you can Credit card companies record payment history MasterCard®, American Express® and Discover®. These credit cards
Paying only the minimum electronically and share this data with credit rating are accepted by most businesses.
balance due agencies. If you establish a pattern that indicates There are many different types of cards with a variety of features, rules, and
Making late payments you may not repay your loans, it can become difficult interest rates, so shop around for a card that meets your needs.
for you to get new cards or other types of credit
Not planning for repayment of credit (including loans) in the future.
card charges in your budget. Money Matters
Disclaimer: 8 Approximately 51% of the U.S. population has at least two credit cards.
Learnovation, LLC’s mission is to empower people to
®
©2017 Learnovation , LLC improve awareness of their own financial situation. Total U.S. revolving debt (98% of which is made up of credit card debt):
All Rights Reserved. This information is intended to serve as a general 8
www.learnovation.com guide of financial principles and strategies. It is not $793.1 billion, as of May 2011
intended to address individual financial issues, nor Interest is how credit card companies make their money. You are charged a
should it be taken as legal, financial, or other advice. 8
fee for the use of their money.
