Credit Cards 101 (Credit Card Basics 1/3) | Summary and Q&A

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July 16, 2016
by
MoneyCoach
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Credit Cards 101 (Credit Card Basics 1/3)

TL;DR

Credit cards can offer rewards and help build credit scores, but only if used responsibly.

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Questions & Answers

Q: What is the difference between debit and credit when purchasing with a credit card?

With a credit card, the money spent on purchases is borrowed from the bank, while with debit, the money comes directly from a personal bank account.

Q: How can Jasmine avoid paying interest on her credit card?

Jasmine can ensure she pays her credit card balance in full by the monthly due date to avoid interest charges.

Q: What are some rewards that credit card users can often earn?

Many credit cards offer rewards such as cash back or airline miles for each purchase made.

Q: How can responsibly using a credit card benefit Jasmine's credit score?

Responsible credit card use can help Jasmine build a good credit score, which is important for future loans and financial opportunities.

Q: What are the requirements for getting a student credit card?

To get a student credit card, Jasmine should be a full-time student of at least 18 years of age, with some income or a creditworthy co-signer.

Q: What are the risks of having a co-signer for a credit card?

Having a co-signer means both Jasmine and the co-signer are responsible for any credit mistakes or missed payments. It is a shared responsibility that should be carefully considered.

Q: How can Jasmine build credit if she is not ready for a credit card with a co-signer?

Jasmine can be added as an authorized user to her family's credit card, which can help her build credit. However, lenders may still want to see her handling credit on her own before granting major loans.

Q: What additional resources can Jasmine find on the website mentioned in the content?

On the website, Jasmine can find educational materials, her free credit score, and great credit card recommendations.

Summary & Key Takeaways

  • College student Jasmine has two types of money to buy things: debit and credit.

  • Credit cards can be expensive due to interest rates, but paying in full each month can help avoid interest charges.

  • Responsible credit card use can lead to rewards and the opportunity to build a good credit score.

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