New To Credit? Know These Terms So You Don’t Fall Into Debt Traps

If you’re new to credit cards, it’s important to become familiar with certain credit card terms. Doing so will help you understand how credit works, so that you don’t fall into any debt traps.

Credit Score: A credit score is like a school grade. It tells lenders if you’re an excellent borrower, fair borrower or poor borrower.

Credit utilization ratio: This ratio compares how much you’ve borrowed against how much credit you still have available.

Due date: Your due date is the time every month that your credit card payment is due.

Finance charge: This is the amount it costs for you to borrow including interest and fees.

Grace period: This is the time period you have to pay back your debts after your bill without having to pay a late fee.

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