Credit Card Basics

A credit card is an important financial tool that lets you buy now with the promise that you'll pay later. It's a convenient way to carry money without carrying cash and a good way to pay for more pricey things over time. It provides financial support in an emergency, and lets you build a credit history.

Using a credit card is like getting a loan. It's not free money. Every time you charge something, you're borrowing money until you pay it back later - either that month or over several months. If you choose to pay the money back over time, the credit card company adds interest to your account that you have to pay along with the purchase amount.

Credit Card Tips

1. Don't charge what you can't afford-even if it looks really good on you.


2. Pay bills on time, and build a good credit history. If you pay bills late, you add a late fee to the money you already owe.


3. Set a monthly spending limit, and stick to it


4. Shop as carefully with a credit card as you do with cash.


5. If you charge day-to-day expenses, pay them in full each month. You don't want to be paying interest charges on a bag of chips.

Payments

When you use your credit card, think of it as getting a loan. Every time you charge something, you're borrowing money until you pay it back later that month or over time. In exchange for this loan, the credit card company adds interest charges to your account, which you must pay along with the purchase amounts if you opt not to pay the balance in full each month. Your monthly statement will show an amount labeled "Minimum Due." This is not a recommended payment amount, but rather the absolute minimum you must pay and the date by which you must pay it to keep your account current. By managing your credit, not going over your limit and paying your bill on time, you're building a good credit history.

Identity Theft

The best way to minimize your chances of being a victim is to keep close tabs on all your personal financial information.

1. Don't give your account number over the phone unless you've initiated the call.


2. Never write your account number or PIN on the outside of an envelope or postcard.


3. Draw a line through blank spaces on charge slips above the total to prevent any extra changes.


4. Save receipts.


5. Always check receipts against your monthly statements. If anything looks fishy, report it within 60 days of the statement's mailing date.

Credit Tools and More Information

Tools and tips to help keep you in the know and on track.

Credit Cards and Financial Budgeting

Use Credit Wisely: For additional information and tips on credit cards, spending wisely, ID Theft, and more.

Budget Builder: Use this tool to keep your spending in check and your budget in place.

Credit Card Glossary: From APR to Zero Balance, this is the place to learn credit lingo.

Credit History

Credit History and Interactive Credit Report: Learn the facts about credit history, including how to obtain and read your credit report.

WhatsMyScore.org: Learn about what goes into a credit score and use the free FICO Score Estimator for an estimate of your score.

Interactive Games

Credit-ED® Challenge: Think you have the know-how to use credit wisely? Size up your credit smarts...see how good you are at credit management, budgeting and more.

Financial Football: Tackle financial questions like professionals in a fast-paced, quiz-style game. Compete by answering finance-themed questions to earn yardage and score touchdowns.

Road Trip to Savings: Defeat the financial challenges of a four week road trip, and prove you can have fun while steering your way to financial stability. The game tests you as you make decisions about income, expenses and savings on the road.