Here's everything you need to know about credit cards and how they work. If you’re new, subscribe! → / msufcu Go here → www.msufcu.org Like us → / msufcu Follow us → / msufcu
For some weird reasons, understanding how a credit card works has been difficult for me, this explains everything for me and made me look like an idiot! 😂
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Mr Smiley Seriously that's not funny. Not only do my nieces and nephews know how credit cards work, they also have been building an emergency fund and contributing to their Roth IRA since 12 years old.
BlackWorldTraveler It’s not a big deal, I don’t plan on making any major investments until after I graduate college, which I’ll probably be 22 or 23 by that time, so I have no use for a credit card right now. And if your nieces/nephews are 12 then they aren’t saving funds, their parents are. Oh yeah and no one gives two shits how your family operates, I’m clueless as to why you think they’re special.
Not the only one lol I’m 22 and was confused on how credit cards work still kinda am but this video was helpful but of course it’s never too late to learn about it :)
@@ultralightcam6963 it’s never to late either, I literally got 19 pts increased since my start. My current score is 650 to give you a perspective of a starting point. I also recommend you download Credit Karma to monitor all your loans. One last thing to give you on this journey, try to dial in on the biggest amount and then do the same for all the other loans. I learned that from “Rich dad Poor dad” and it makes since because you don’t won’t to spread yourself thin at the end of the month. Best of luck to you & much love!
Sourav Mondal credit line is when you you give the bank a deposit, lets say 400$ and they give you a card that has a spending limit of that amount. They will expand it until you are responsible enough to manage a larger amount.
D'Faro I'm confused. So if you have a limit on certain credit cards, what happens when you go past that limit? And how can you make that limit go higher? What do you do to show your bank that you're responsible enough to handle larger amounts?
Matthew Hopkins good question! first of all, if your limit is 500 dollars, you should keep that in mind every month. I had a discovery card when I first enrolled in college, and they would decline transactions once I was at my limit. it's you who must talk to the bank or lender to have that restriction impose. If you want to be responsible, don't spend above your means. don't buy things you know you won't be able to pay in full back. always make sure you pay on time and every time. Those late charges add up very quick. If you followed what I've said, than after 7 months to a year; ask the bank that you want to increase your spending amount. they should agree base on your early payments. I hope I helped you!
VERY well done ! I say this with 40+ years in mortgage finance & banking working with credit bureaus. Different models and parameters are used by different industries but *Linux tech corps* info is pretty much universal. If you're trying to max your credit scores, there is a happy medium between too many credit cards and none. Too many cards with zero balnce may actually hurt you in some cases. Even if you do not use them, you have a potential. To always pay cash & still have cards doesn't help your scores as well
I have 2 chapter 13’s that are dismissed. The reason I have 2 is bcz I did not use an attorney. I was trying to stop an eviction, but when I went to try to add another month’s rent to the bankruptcy, but the guy filed another one. About a month later, I ended up losing my job. They are scheduled to fall off in January and March 2021. Since I’m looking to purchase a home soon but still there. I am currently enrolled in *850Financial assessment* and I must say, I am loving it thus far. I’m doubling it up with your podcast videos and learning A LOT! Thank you. I’m ready to join the millionaire club!!!
Finally now I understood how to use the credit card. All other videos out their are very complex to understand. But this one really gets the job done ✅✅🎯🎯
I'm 24 ill be 25 this year. I'm gonna take out a credit card soon it good to K ow I'm basic terms how it works and my time frame and Interest. I'm glad im personally taking the time to learn.
The thing I don't understand about credit is, If I use a credit card and purchase a lamp for $10, and then, like the video said, have to pay back that $10 at the end of the month - why wouldn't I just use the $10 I used to pay back the credit card on the lamp in the first place? It sounds like credit cards are an unnecessary middleman - with the possibility of owing more if I miss a payment or only pay the minnimum amount.
What you're talking about is the most common use of credit for those who want to take advantage of the impact it has on their credit rating. If used correctly, credit cards can dramatically boost your credit rating which in turn helps you to afford a nicer home or borrow money to make money. Additionally, you could sign up for a card that provides rewards that tailor to your lifestyle. For instance mileage rewards for those who commonly travel for work.
I completely understand what you're saying because I used to think this same way. But to simply put, one would use it to establish credit. Credit (and a good score of it) is the main goal because without it you can't take out loans for anything: car, house, business etc. You would need these loans because the average individual can't pay off a $40,000 car or $200,000 home in pure cash.
I'm 15 years old and I didn't have a clue what any of this was. The video explained things in a very simple manner so it was easy to understand. Thank you!
So what ever u spend using ur credit card that's how much u will have to pay back? I want to get a credit card for the first time n I wanted to make sure I understood everything correctly.
No. It sounds like it is but not simply. You pay back with interest, remember that! You may buy something for $280 but as the video said unless you pay the full amount on or before the due date that 280 may change to 500 depending on the apr (or interest rate) of the credit card. I'm not sounding harsh but giving you this as a reality tip so that you don't carry this mentality into any place especially when it comes to money.
I'm in yr13 and this is the first time I will understand how a credit card really works. Before that all I ever knew was that Credit and Debt= Bad and that a credit card means you borrow money. But apart from that my knowledge was null.
Gooooood SIMPLE super easy to understand it and how credit cards work. Straight to the point with no fancy words etc etc. The BASICS. The bestttt video ive seen ever explaining how credit cards work👌👌👍👍👍
What nobody tells you is that paying off your entire balance every month also hurts your scores because the last payment made gets reported to the bureaus as the monthly payment amount, not the minimum payment. The minimum monthly payment is only reported when you only pay the minimum. But if you charge $500 on your card and pay it off that month, your monthly reported payment will be $500. Paying extra can impact your debt ratio and make you appear a risk when you have perfectly normal ratios.
I've been looking for something like this to explain how credit cards works, since I am just new to this kind of stuff. This video made it easier to understand for beginners like me. Thanks!
Thank you for this video. I have not learned anything about being an adult from school, and neither have my parents taught me anything really. I’m 19 now so I need to hop on this shit lol.
It's pity how many people don't know this. I have friends that got to pay so much money and still don't understand why their loan is big... Some even withdraw money with their credit! Yikes! @MSU Federal Credit Union, that's something worth be mentioned
This will help me be responsible with a credit card so I could have a car loan so I will learn front this video not waste on stuff I don’t need or use it unresponsible and pay them on time and gonna use for groceries and gas only
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WOW I wanted a credit card before watching this!! this is horrendous.... but I was one of the ones that had my credit and social stolen as a child and now I cant even get a credit card because I don't remember my jobs over other states as a toddler....I must have amnesia
It should have been clarified that the minimum payment for the $280 over 9 months was for that payment alone and it didn’t not include if he were to make additional payments for other months. Great introduction video to credit cards.
So say my apr is 23% and my outstanding debt is 1200, I pay $400 leaving 800 left after due date does that mean I accrue an extra $184 worth of debt for my next payment?
Credit score is not something used in all countries though. In France, they determine if you are eligible to get a loan (e.g., to buy a house) based on the ratio between your salary, your expenses and your savings. Basically, if every month you 'burn' all your money, you're perceived as riskier than someone earning less but consistently making deposits to a saving account. I feel in the US people tend to buy things they don't need with money they don't have... The only times I feel one should need a credit is when buying 'big' things (house, car, etc.). Not for a TV. I’m 26 with over 800 credit score, time was put into that to build it up by *850financial assessment*
At 34 years old I finally feel ready to settle down long enough to buy a house. Unfortunately due to previous horrible stupid life decisions, I'm forced to start with a zero balance in my savings account. On the bright side, the huge amount of debt - consequence of those bad decisions will be payed off next month! 🥳 It's never too late to start saving like there's no tomorrow, and I'm really REALLY excited and motivated. Oh and Monique, fyi my emergency fund is also a done deal! by *Linux Tech Corps* lol, i didn't made it myself
Credit scores are just a form of control, so if you want to continue living a good life, it’s important to have a high score. My house and vehicles are paid off, I have one Visa card for all purchases, which gives me air miles, and I pay it off monthly, but my score bounces between 800 and 820 without changing any of my patterns, so it’s manipulated for some reason. *850financial assessment* made it stay at that range and getting it up
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8%? More like over 20% a month and it’s compounded interest. So if you borrow $100, next month you’ll owe 120 and the next month will be 20% of 120. It grows really fast if you only make the min payment.
Not really, it’ll just take you longer and you’ll be charged interest and will have to pay a bit more than you owe but as long as you pay on time with the required minimum amount then as long as you are happy with the interest it’s fine!
I dunno… I was one of those people that didn’t care about a credit score, didn’t get any education about how important your credit score is, and I racked up debt like an idiot. I worked really hard and educated myself and I’ve brought my credit score from 480 to 732 and I’m still going up with *850FINANCIAL ASSESSMENT* . I feel like the government blaming credit reporting companies instead of the lack of financial education in their own public education system is foolish.
still dont get it... so they give u a card and I'm guessing they give u money on it already, can u have ur work place do direct deposit on ur credit card? and if u do u spend ur money and spend 400$ that u got u will have to pay back the 400? or wat
Thank you for your question. When you are approved for a credit card money isn’t added to the card. What happens is you have a credit limit, which says how much you’re allowed to spend using that credit card. A credit card is a loan from a financial institution (ex. MSUFCU). When you receive a credit card you are borrowing the money from that financial institution and any purchases you make with the credit card have to be paid back. So if you spend $400 using your credit card, that money is borrowed and you will need to pay that amount back. Direct deposit can’t be deposited to a credit card, only to a checking or savings account. If you have additional questions, feel free to give us a call at 800-678-4968 or contact us through our live chat at msufcu.org.
call me idiot or not but I have a question, When does interest kick in? I mean if he pays 35 every month, by 8th months, his debt should be paid off. 35x8=280. Where the heck did the "9th month" come from?
Hello Kevin, don’t be so hard on yourself, this information can be quite complicated. He did not pay his balance in full at the end of his billing cycle, so interest will start to build after his first payment. In this example, his interest rate is 8.9% APR so for every month that he does not pay his balance in full, he’s paying 8.9% APR on the remaining balance. If he makes only the minimum monthly payment of $35, it will take 9 nine months to pay off the couch & mini fridge. He would end up paying $315 (original balance, plus interest) instead of $280. He would have paid $280 if he paid his balance in full by the first due date after he made his purchase. If you have additional questions feel free to give us a call at 800-678-4968 or contact us through our live chat at www.msufcu.org.
I have a question. Say you have a $300 limit. Would it better for my credit score to improve if I spent and paid back $280 than spending and paying back $120? Hopefully this question makes sense.
Credit card is a loan type. It’s not your money. Like saying, if you borrow $500 from a company, would they want it back eventually? Yes. Debit card is used your own money.
I'm in 8th grade and they never once taught us about this stuff... honestly what us school for, and I'm not saying to drop out or anything but just think about it...
I take out monthly advances from my bank (no interest) put it in my savings account then when I use my credit card i pay it off in full right away I don’t always use my credit cards either unless I have no cash on me or in case of emergency then I use it, young people go into debt and end up getting in trouble because they use a credit card like a debit card then end up in a lot of debt
What do u recommend? I’ve been paying it off full. But I’ve been told recently to pay minimum, get charged the fee and my credit score will go up. Lmk!
However for the seller the company issuing credit card will charge a commission... And it will be debited in his a/c also it will be selling exp for the seller
so basically, credit cards are quick and easy loans with little to no benifits other than cashbacks/more loans which have more interest, got it, I think I'll stick to a debit rewards card with no over draft lol
This was very helpful, I just wanted to clear up one thing. So I got approved for a credit card with a $500 limit. If I only spend $200 in a month do I pay 500, or only the $200 that I spent?
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Thanks for all of the info that you give, Monique!! I found your channel and have become very educated as to how credit works. Looking forward to the webinar!!! Saw some info on Diamond Chanel's channel; is she your daughter? I will also subscribe to her channel as well; just wanted to make sure it wasn't a scammer, lol. I am grateful for your platform; so many things not aware of in the past now trying to get it right. I will be 59 this year so my goal is to become more credit savvy before I reach retirement. I was about to sign up for credit repair with Lexington Law and lucked up on *850FINANCIAL ASSESSMENT* ; look at GOD!!!
