Financial Literacy
Money Matters
CREDIT
Credit cards are a vital branch of our financial structure as they allow for purchases to be made without limitations. As long as the monetary commitments are fulfilled at the end of each month, credit card holders have the ability to maintain a good credit score and continue their privileges.
DID YOU KNOW?
In 2012, there were about 1.62 billion credit cards circulating the United States.
Credit payment was the highest method of payment in 2013.
There are many factors that determine your credit score. Some include payment history (including punctuality), amount of money owed, length of credit history, and the number of open accounts. An ideal credit score would be anywhere between 650-700. Above 750 is considered an excellent score.
What is a healthy credit score?
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Excellent Credit: 750+
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Good Credit: 700-749
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Fair Credit: 650-699
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Poor Credit: 600-649
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Bad Credit: below 599
Maintaining a good credit score has many benefits for your reputation in the financial world. It’s a direct reflection of your punctuality and integrity as well as your reliability. A good credit score, literally, gives you credibility; you will be able to qualify for loans quicker and easier than someone with a low credit score.
Credit card payment plans, such as annual or monthly, depend on the type of debt you have and its allotted time for repayment. For example, the time to pay back a car or mortgage debt is generally longer than credit card debt.
“Procrastination is like a credit card: it's a lot of fun until you get the bill."
Christopher Parker
DEBIT
Debit cards are generally simple to handle. They do not have any binding commitments like credit cards do, and are always pre paid for, and can be refilled whenever necessary!
Debit cards are the most viable option for teenagers and young adults who want the experience with monetary transactions but do not have enough knowledge to handle or keep up with a credit card account.
The best part - just like credit cards, some debit cards come with rewards programs.
One of the major concerns of debit cards is identity theft. If used while lost or stolen, the most money you can loose is $50, only if you notify your financial institution within two business days after learning of the loss. If not, the fee goes up to $500 and after 60 days or after the statement is mailed, there is no limit.