Lessons | Credit Card Topics

Soft Inquiry vs. Hard Inquiry — What is the Difference?

By: John Ulzheimer, 4/6/2020

When you apply for credit, a lender is almost always going to access one or more of your credit reports. Lenders do this as part of their risk assessment and underwriting procedures. This process is formally referred to as a credit inquiry, which is actually both a noun and a verb. Differences | Exceptions | Credit Score Impacts What is a Credit Inquiry? Before we dive into the specifics of the different types of credit inquiries, it helps to understand more about them. A... read more »

How Credit Card Companies Make Money

By: Andrea Woroch, 3/9/2020

Americans love credit cards — why pay now if you can pay later and earn rewards for doing so? Unfortunately, poorly managed accounts can quickly deflate your bank account and end up costing you more than you charged to the card in the first place. That’s because credit card companies charge interest on the balance you carry every month. But this isn’t the only way card companies make money. In addition to the fee you pay for borrowing their digital dollars, you may be on the... read more »

How to Build Credit as an Authorized User

By: Andrea Woroch, 1/9/2020

Wouldn’t it be nice if people were just born with excellent credit? Unfortunately, credit is something you must establish, build, and maintain over time. And, if you believe you don’t need credit, think again. A healthy credit score is your ticket to reaching many life goals — whether that’s buying your dream home or starting a business. Even if you just want to rent an apartment, own and insure a car, or open a credit card that offers a cool travel rewards program, you... read more »

Variable APR vs. Fixed APR — What’s the Difference?

By: John Ulzheimer, 1/2/2020

When you’re shopping for a new credit card, you probably pay close attention to the annual percentage rates (APR) of the cards you’re considering. The APR is important because if you choose to carry a balance from one month to the next, the APR is used to determine the cost of servicing your debt. What you may not realize, however, is that your APR can possibly change over time. Whether your credit card features a fixed APR, meaning it likely won’t change, or a variable APR,... read more »

APR vs. Interest Rate: Is There a Difference?

By: Marcie Geffner, 12/9/2019

Borrowing money often involves fees. One such fee is interest, which is calculated as a percentage of the amount you owe. The percentage is the interest rate. For example, if you borrowed $1,000 for one year with an interest rate of 4%, you'd owe $40 of interest. An interest rate that's calculated on a yearly basis is known as an annualized percentage rate (APR). An APR always includes interest. It may also include other fees related to the loan. For example, if you applied for a... read more »

Understanding Credit Cards: A Beginner’s Guide

By: Marcie Geffner, 11/13/2019

Similar to your first job, car or apartment, your first credit card is an important milestone on your journey from youth into adulthood. To do adulting right, you'll want at least one card in your own name. While you can manage your personal finances without any cards, you'll find life in the grownup world is much easier with them. Cards can help you shop online, rent a car, book an airline ticket, reserve a hotel room, set up cellphone service, and more. Cards for beginners... read more »

Charlie: An AI-Based Chat Platform that Helps Consumers Save Money, Create Goals, and Make Better Financial Decisions

By: Adam West, 11/8/2019

In a Nutshell: Charlie is a chatbot-based penguin that learns the personal money habits of users and serves up advice and notifications to improve their financial well-being. The platform works via text message and through a web interface and doesn’t require an app or software download. Users submit data anonymously, and Charlie keeps track of balances, creates financial goals, and answers financial questions in a pressure-free environment. Chatbots rose to prominence several years... read more »

MoMath: The National Museum of Mathematics in NYC Helps Adults and Children Better Understand the Universal Language Behind Finance

By: Adam West, 9/26/2019

In a Nutshell: New York City’s National Museum of Mathematics (MoMath) has welcomed more than 1 million visitors since its grand opening in late 2012. The Museum provides a fun and engaging atmosphere for adults and children alike to develop a love of math. The institution hosts regular events and programs that cater to a wide variety of demographics — from toddlers to CEOs. And it fosters new ways of thinking about how math affects our everyday lives — and what it makes... read more »

What Is a Credit Card Utilization Rate?

By: John Ulzheimer, 6/11/2019

The world of credit is filled with countless terms and acronyms that you probably will not hear in normal conversation. One such term you’re likely to come across when reading about credit scores is “credit card utilization rate” or, more formally, “revolving utilization ratio.” For the purposes of this article, let’s agree to refer to it as your utilization ratio. Although utilization ratio may sound confusing on the surface, it’s actually not at all difficult to... read more »

The BusyKid App Helps Parents Teach the Value of Work and How to Manage Money

By: Adam West, 5/29/2019

In a Nutshell: Today's kids tend to experience money as plastic, not as physical cash, which makes it harder to teach them that money must be earned and managed for the future. The BusyKid app is fixing that. BusyKid lets parents assign chores to their children and compensate them every week as if they were receiving a paycheck, automatically allocating portions of the funds for saving, sharing, and spending. BusyKid is a convenient way for parents to teach their children to manage... read more »

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