The Good, The Bad, and The Ugly How to Manage

Transcript:The Good, The Bad, and The Ugly How to Manage:
The Good, The Bad, and The Ugly How to Manage Your Credit So You Can Be in Control 1 © Crystal Clear Profits, Inc. 2018 All Rights Reserved About Me Nancy Lee Ma, CEO and Founder of Crystal Clear Profits, Inc. 30 years as a CPA. Mother of 3 children, involved with schools before my first child was born. Sole owner with a traditional accounting practice as well as teaching entrepreneurs how to manage their finances, and teaching students financial literacy. © Crystal Clear Profits, Inc. 2018 All Rights Reserved 2 What Is Credit? Credit is a loan where you promised to pay back the money you borrowed plus interest charged. Most familiar type of credit is a credit card. Credit cards work a little differently than a regular loan. Other types of credit or loans consist of mortgages for a home, car loan, or personal loans. Generally loans are used to purchase higher priced items such as a appliances, travel expenses, or online expenses. Use of credit cards for everyday purchases can get some in trouble. The most common example of using credit is: Go to the store and swipe your credit card and then sign your name for the purchase. 28 days later or even sooner, depending upon when you charge your purchase, you will receive a statement that says you charged $xxx.xx to purchase an item. If you don’t pay the money back within the time allotted such as the 28 day period, you will need to pay interest on the amount that you borrowed. 3 © Crystal Clear Profits, Inc. 2018 All Rights Reserved How Does It Work? Along with the privileges of becoming an adult, your parents are no longer obligated to care for you and they are no longer responsible for any of your actions or your debts. In order to get credit, you need to build up your credit by building up a credit history and a credit score. You must apply for a loan or fill out a credit card application. The amount of credit and the interest rate the companies charge depends upon your credit score and history. Student credit cards help build up credit. Most major banks offer student credit cards and will usually be $500. Start establishing your credit by making sure that whatever you charge, you pay within three weeks. A credit card statement usually has a billing