1. Money

Credit & Credit Cards

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Your credit defines your reputation for borrowing money. Good credit means you have a good reputation for borrowing - you borrow what you can afford and pay it back on time. Credit can also be used to describe the amount of money you're able to borrow.
  1. Introduction to Credit
  2. Build Good Credit
  3. Learn How Credit Cards Work
  4. Choose the Right Credit Card
  1. Use Credit Cards the Right Way
  2. Pay Your Credit Cards the Smart Way
  3. Protect Your Identity From Thieves
  4. Know Your Rights

Introduction to Credit

The definition of credit is expanding as more companies want to know your credit history before doing business with you. For example, did you know a cell phone company gives you one month of service as a "credit" in expectation that you'll pay for your usage once that month is up. That's right. Anytime you're given a product or service before you pay for it, you're being extended credit. Of course, that includes being allowed to use someone else's money.

Build Good Credit

Once you understand credit and begin to use it, these tips will help you build good credit.

Learn How Credit Cards Work

There's more to a credit card than plastic, numbers, and seemingly-free goods. A lot goes on after you swipe your credit card. Being ignorant to those behind-the-scenes processes could hurt both your wallet and your credit. Find out everything credit card companies don't want you to know about credit cards.

Choose the Right Credit Card

Choosing a credit card isn't as easy as choosing a pair of socks. It's more like choosing a television. You need to check all features and pricing before you decide which one is best for you.

Use Credit Cards the Right Way

Though credit card terms and conditions are complex, the rules of using credit cards are fairly simple. If you follow them, you'll be able to borrow money for free and raise a good credit score. Breaking and ignoring the rules results in the opposite - expensive credit card balances and a damaged credit history.

Pay Your Credit Cards the Smart Way

Of all the factors that go into a credit score, your credit card payment history has the most significant impact on your credit score. So of course, you should pay close attention to when you make your credit card payment and how much you pay.

Protect Your Identity From Thieves

Identity theft occurs when someone uses your personal information to make some kind of profit. They may get credit cards in your name, write checks against your checking account number, or even use your existing credit cards to make purchases. It can take years to completely recover your name, so protecting yourself is the best option.

Know Your Rights

Many laws protect your credit and govern the businesses that give credit to you. Knowing these laws can keep businesses from taking advantage of you and help you fight back against those who violate your rights.

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