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Course: Financial Literacy > Unit 3
Lesson 2: Credit cards- What is a credit card?
- Choosing a credit card: credit card types
- Choosing a credit card: what to look for
- Schumer boxes and the things you should know about your credit cards
- Understanding credit card terms
- Which credit card is better for you?
- Credit cards
- Credit cards: the good and the bad
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Schumer boxes and the things you should know about your credit cards
A Schumer box is a standardized format for displaying key terms and conditions of a credit card in a way that is easy for consumers to understand. In a Schumer box, information such as the annual percentage rate (APR), annual fees, balance transfer fees, and late payment fees are all laid out in a table format so that consumers can quickly compare different credit card offers. Created by Sal Khan.
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this is boring(2 votes)
When I get bored, I tend not to pay attention. But in this case, when you're dealing with establishing credit (which you'll need for lots of important things later), you've gotta push yourself. Maybe take a break and come back to it later.(43 votes)
Can someone have multiple credit cards from multiple banks? I'm thinking of some conspiracies. Let's say a fictional man, Carlos, had 2 credit cards from Bank A and Bank B. He used card A to purchase a bunch of stuff, and left card B untouched. He then used card B to pay off card A's balance in time. By the time he had to pay off card B's balance, bank A would have added new balance to his credit card, and once again, he would continue using his credit cards to buy stuff without actually spending his own money. (please don't take it too seriously :)(6 votes)
Sadly, credit card balances cannot be paid off by using another credit card. You can only make credit card payments from bank accounts that actually have money in them. What you can do is transfer one credit card balance to another card, but there is a fee involving that, so, essentially, it will cost you to do that.(12 votes)
What are some good beginner credit cards?(7 votes)
Low interest credit cards.(7 votes)
- i think one credit card is good because if you get behind on the payment then you get put in debt.(3 votes)
- One credit card is definitely enough. Every time you use a credit card, you produce debt. The issue is not whether you owe or not, it is whether you are capable of managing that debt. One card is enough, two may be an interesting thing, but more than that can be debt-management-hell.
In general, we all want to stay far from hell.(11 votes)
What is the difference between a transfer and a purchase? Is transferring limited to just individual accounts while purchase is limited to verified business accounts?(3 votes)- A transfer happens in a case like when you are carrying charges from one month to another on your credit card, and another bank offers to let you borrow money from them, and pay off the first card. You "transfer the debt" from First National Bank to Second Community Bank, which might give you a better interest rate on the loan than First had been offering you.(10 votes)
At3:44, he talks about billing cycles. How do we know when the cycle starts and ends?(3 votes)- When you go to the bank and talk to the nice person there who helps you to apply, you get a chance to say when you would like to be billed every month. You set that yourself at the time you get the card.(7 votes)
what is the diffrence between a debit card and a credit card(2 votes)- A debit card takes your money that is already in your account. It is already your money, the debit card allows you to put that money into the bank, and access it from all over the place. But, with a debit card, you are not borrowing. Neither are you building a credit score.
A credit card allows you to borrow money that you don't have yet from the bank. If you do that, the bank will ask for you to pay that money back. You can do the repayment gradually, but you will have to pay additional "rental fees" (interest) on whatever you borrow.(9 votes)
What is a cash advance?(3 votes)- A cash advance is when you use your credit card to get cash. That costs more because the bank has to handle the cash and account for it physically, not just as a number in a computer file.(7 votes)
- I want to say thank you for all this information. Is helping me a lot.(5 votes)
This honestly hurts my brain to understand, I think I want to start working on my way to do this...(3 votes)- Even though it hurts, you should try to understand it. So many people get messed up with their credit cards. So, I suggest that you do the lesson, even if you don't understand it. Then wait a week, and do it again. Do that, week after week, for as long as it takes you to understand just this lesson. Then choose another one, and work through it that way, too. Soon enough, you'll be understanding them the first time through, then you can teach others.(4 votes)
3:44