CREDIT 101

Think of this as a crash course, a cheat sheet, a cram session in good credit. We call it Credit 101, and if you pay attention and commit this stuff to memory, you'll do just fine with your new credit card...

Lesson #1:

Your card is yours and yours only. Don't share your card or your receipts with anyone. And remember, if you lend your card to a friend, you are still 100% responsible for paying for any purchases.

Lesson #2:

Once you get your card, immediately sign the back of it. Merchants will compare your signature on the back of the card to your signature on your receipt as a security measure.

Lesson #3:

Keep track of all your purchases and save your receipts. Each month, compare your receipts to your card statement and make sure all the information is correct.

If you have any questions about any section of your Capital One statement or believe there has been a billing error, call us immediately. Don't wait - you may inadvertently add extra finance charges to your balance.

Lesson #4:

Try not to use your credit card for identification purposes. If you do, don't let anyone copy information off your card.

Lesson #5:

Never give your card information over the phone or on the Internet unless you know that the company has a good reputation. If you have any doubts, check with a parent or trusted adult. Or, you can contact your local chapter of the Better Business Bureau. They can help you determine who the good guys are and who the bad guys are.

Lesson #6:

Keep records of your credit card account and issuer telephone numbers in a safe place in case any cards get lost or stolen. If you lose your card, or if it gets stolen, don't panic. Immediately report the loss to us and also let your other credit card companies know.

Think you can handle it? Sure you can. Having your own credit card is exciting and managing it responsibly can help you establish good credit - something you'll need later down the road.

Credit Lingo

Common Terms

Here are some commonly used terms that you need to know when dealing with credit.

Credit Card:

A credit card gives you a way to buy without paying cash up front. It's great to have in case of an emergency, and it gives you the freedom to purchase anything from textbooks to concert tickets. Getting a credit card and managing it responsibly can help you establish good credit, which you'll need further down the road to get loans, more credit and possibly even a job.

Credit Limit:

This determines the maximum amount you can spend with your card. Your credit history, your income and any outstanding debts you may have all help determine your initial credit limit.

Credit Bureaus:

These are the guys with all the credit info. Their data states whether you've been paying your credit card bill - and other bills - on time. The information goes on your file for up to seven years. Credit bureaus can share your file with lenders who use it to decide your future credit limits. Landlords sometimes use this information when you try to rent a house or apartment, and employers can refer to it when you apply for a job.

Grace Period:

The stated minimum number of days during which finance charges (interest) do not apply to new purchases if you pay your outstanding balance by the due date. If you choose to pay for your purchases over an extended period of time, you will be charged interest.

Annual Percentage Rate:

Your APR is the yearly interest you pay on your balance.

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