Transcript:
Credit is an agreement to borrow something from a person or bank...
…with the promise that you'll pay them back at a later date.
When you borrow from a bank or credit card…
…they might charge you interest.
You might ask, “Why charge interest for credit if I'm going to pay it all back?"
Even-Steven, right?
Well, while most people pay back in full…
…there's still some degree of risk or loss when companies lend money.
And an interest charge helps to cover that risk.
So, how do people use credit?
Perhaps you want a mortgage to buy a home.
Or want quick access to emergency funds with a credit card.
Using credit wisely, in such cases, can be convenient.
So that's credit. Find more ways to know and grow your money at vividcrestonline.com.
LEARN MORE: Video - Money: Know It to Grow It - Compound Interest