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Manage Credit and Debt

 Used properly, credit cards can be an effective tool for building your credit history and weathering unforeseen emergencies. Your credit score can affect the interest rate you pay after financing major purchases down the road, such as your car or home. Yet beware credit debt also accumulates quickly, and, with interest, it can be a struggle to repay.

If you are just starting out and looking to build credit, learn how to compare terms and fees so you can pick the best credit card for you. Pay more than the required minimum by your due date if you can. If you are feeling overwhelmed by credit card debt, seek out legitimate credit counseling options, and be cautious about scam services.

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     Key Terms

    APR (Annual Percentage Rate): The cost of borrowing money on a yearly basis, expressed as a percentage rate.

    Borrow: To receive something on loan with the understanding that you will return it.

    Cosigner: An individual who signs a loan, credit account, or promissory note of another person as support for the credit of the primary signer and who becomes responsible for the debt obligation.

    Credit: Borrowing money, or having the right to borrow money, to buy something. Usually it means you are using a credit card, but it might also mean that you got a loan.

    Credit limit: A limit set by the credit card company on how much you can charge on the card it issued to you. You can use your credit card to make purchases up to your credit limit.

    Dispute: Occurs when the borrower believes a charge has been made to their credit in error. The borrower has the right to dispute the charge to the credit card company.

    Grace period: The number of days you have to pay your bill in full before finance charges start. Without this period, you may have to pay interest from the date you use your card or when the purchase is posted to your account