Q2 Writing Task 8th Grade ELA Davis, Philarin 1 of 11 of 1 Items Credit Cards Source 1: Using Credit 1 Credit cards are a popular alternative to making cash payments for purchases. When used wisely, credit cards are a convenient way to manage payments while building users’ reputations for credit trustworthiness. If managed poorly, users end up with overwhelming bills and little access to credit. How Do I Use Credit? 2 When you use a credit card to make a purchase, you’re using a loan to buy through credit. Later, you pay back the amount you borrowed along with additional funds called interest. What Is Interest? 3 Whoever loans you money is performing a service for you, so you must pay that lender a fee, or interest, for the service. The amount of interest you pay is based on a percentage of the amount you are loaned. The higher that percentage—or interest rate— is, the more money you pay the lender. Credit cards have different interest rates, so it is important to know the annual percentage rate (APR). The APR is the amount you pay during a whole year. How Do Credit Cards Work? 4 Using your credit card is like getting a loan, since you are borrowing money from the company to buy something. For example, when you buy groceries using a credit card, the credit card company is paying the grocery store for your purchase. At the end of the month, the company sends you a bill, and you pay the company back for the cost of your groceries and any other purchases you made that month. How Should I Use My Credit Card? 5 Consumers use credit cards for a variety of reasons. Some people use a card to make purchases when they don’t yet have enough money to cover those costs. Others want to prove they can be trusted to pay back what is borrowed, so that their record of using credit is good when they want to borrow money again. Many people use credit cards because the cards are easier to carry than cash is, and it is more convenient to pay a monthly bill than it is to carry cash and use bills, coins, or checks with ever