Intro to Borrowing
Credit Cards
OK, so now can we talk about credit cards?
Yes we can!
I’m still trying to figure out how using a credit card is the same thing as taking out a loan. You said that loans have a principal amount, an interest rate, and a repayment schedule. That doesn’t sound like a credit card.
It’s true that most of us don’t think of a credit card balance as a type of loan, but it is. And it’s a kind of loan that gets many people in trouble.
What determines the size of your credit card payment each month?
Your credit card company
A credit bureau
Your credit score
You
How can you avoid paying interest on your credit card purchases?
Stay under your credit limit at all times
Pay off your balance in full every month
Pay your credit card bill on time every month
Make at least the minimum payment due every month
What’s a credit limit?
The maximum interest rate on a variable loan
A score that reflects your credit worthiness
The maximum amount you’re allowed to borrow on a credit card
None of the above