Hey Sam. Well I want to buy a car but I don't have enough money right now
Well I can help you with that! I can teach you about credit/loans, credit cards, and credit scores and reports! Its actually quite simple and will be useful to know when buying a car!
Credit and loans are a really good thing when wanting to buy something expensive like a car. The first thing you will want to do is apply for a credit card. Once approved, you can borrow money from he lender you chose, and make payments each month to pay back the money you borrowed. It can also be a bad thing if you don't know how to mange it. The bad thing is that you can end up paying more money back then you borrowed.
Well awesome! How do they work?
It has to do with something called an interest rate. An interest rate is the what the lender will charge you if you make late or incomplete payments each month. To avoid paying the interest, just make sure you don't spend money you don't have, and pay back all the money you have spent each month on time. If you don't do this you will be charged interest. Its also important to know that interest rates will vary depending on which lender you use. You want to make sure you are getting charged a low rate if you cant make a monthly payment for whatever reason
How would I end up paying more money then I borrowed?
Ok that sounds pretty simple. I just cant spend money I don't have, I have to make payments on time, and apply for a credit card
Well there are other things to know too. As we talked about, to spend the money, you have to find a lender. Lenders usually are the banks themselves. In order to spend the money you want to borrow, you will need a credit card. As we said, you need to make monthly payments on the credit card on time, and in full. Credit cards do have minimum payments you have to make each month, but don't be tempted to pay less. You want to pay off all the money in full because you will only be charged more in the long run.