Credit is any form of borrowed money. It may come in the form of a credit card, a mortgage, a car loan, or a personal loan, and it usually always has an interest attached, which is the percentage fee you pay for the convenience of borrowing the money. Any time you borrow money, you are using credit. Credit is available to you to purchase the things you need when you don’t have the cash. Although paying for things in cash is the cheapest route to go, very few young people have enough cash to make major purchases like a car or home. So, a lender such as a bank, a financing company, or a credit card company, comes along and offers you the opportunity to borrow money. These companies make profits off of the interest and fees they collect from you and other borrowers. They watch how you handle the repayment of every form of credit you have, and they determine the interest rate they will charge you based on your credit history and your level of risk. The higher risk you are, the more you will pay in interest and card fees.

“Buy now, pay later!!” Have you seen these magical words before? Chances are you have, and, no, it’s not a myth. When you use credit, you can get just about anything you want today, and you can delay paying for it in full until weeks, months, or even years later. All of this in one tiny ―sometimes oh-so-stylish― plastic card with your name on it! But, there is one major problem.  If you buy things on credit, you may be spending more than you ever imagined. And if you overspend, you may spin out of control and be forced to detour into years of debt repayment. Your progress toward your financial goals will come to a screeching, brake-squealing halt, as you struggle to get back on track.