© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Slides:

Advertisements

Similar presentations

Family Economics & Financial Education G1 © Family Economics & Financial Education – Revised October 2004 – Credit Unit – Selecting a Credit Card.

Advertisements

Credit Buy Now, Pay Later. Credit Someone is willing to loan you money (principal) in exchange for your promise to pay it back, usually with interest.

Types of Credit Consumer Loan One time loan that the borrower pays back in a specified period of time with a pre-determined payment schedule Home mortgages,

Credit Chapter 10.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 18 SLIDE Credit Fundamentals Cost of Credit.

Understanding Loans and Borrowing Money. Development of Credit  In the Past  Credit Today.

6-1 CHAPTER 6: BORROWING ON OPEN ACCOUNT. 6-2 The Basic Concepts of Credit Why Borrow?  To smooth consumption  To avoid paying cash for large purchases.

In Unit 4 we will see the importance of using and managing credit effectively in the financial planning process.

CREDIT. ADVANTAGES OF CREDIT advantages: o Able to buy needed items now o Don’t have to carry cash o Creates a record of purchases o More convenient than.

Understanding Your Credit Card.  More than eight percent of American households owe more than $9,000 on their credit cards.  The average college student.

Chapter 7: Credit Cards and Consumer Loans Garman/Forgue Personal Finance Ninth Edition PPT slide program prepared by Amy Forgue and Ray Forgue.

Credit Cards 101. Today’s Presentation $ Introduction $ Credit card basics and terminology $ Obtaining a credit card $ Extra information for you $ How.

Dealing the Cards of Credit Credit cards No set time to be paid back May pay in full, part, or minimum payment No finance charge if bill paid in full.

Credit Cards Adult Living. Advantages of using credit It’s convenient. You don’t have to carry large amounts of cash and you don’t have to go through.

Understanding a Credit Card Take Charge of Your Finances.

Credit Cards The Essentials to Take Charge of Your Finances In your opinion, do consumers spend more per month on average when they use a credit.

Family Economics & Financial Education G1 © Family Economics & Financial Education – Revised October 2004 – Credit Unit – Selecting a Credit Card.

 Buying on credit = buy goods and services now and pay for them later (usually with interest)  Having credit depends on the suppliers’ confidence in.

Chapter 16 Credit in America

 dvice/glossary.htm dvice/glossary.htm.

6 - 1 COPYRIGHT © 2008 by Nelson, a division of Thomson Canada Ltd Chapter 6 – Borrowing on Open Account.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

PFIN 6 Using Credit 4 GITMAN/ JOEHNK/ BILLINGSLEY

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Securing Your Financial Future Cash Management Presented by Teresa Muench NEA Member Benefits April 4, 2015.

Credit Credit is a sum of money a person can use for a period of time before having to reimburse the lender.

Advantages of using credit cards Ability to use item while paying for it No need to carry cash Use of card builds credit history Quick source of funds.

Chapter 6 Consumer Credit

6-1 CHAPTER 6: BORROWING ON OPEN ACCOUNT. 6-2 The Basic Concepts of Credit Why Borrow?  Avoid paying cash for large purchases (like a car)  Meet financial.

Annual Percentage Rate (APR) The amount it costs you a year to use credit, expressed as percentage rate Interest, transaction fees, and service charges.

Credit Cards 101. What are Credit Cards? Pre-approved credit which can be used for the purchase of items now and payment of them later.

2.4.1.G1 Take Charge of Credit Cards “Get Ready to Take Charge of Your Finances” Introductory Level.

2.4.1.G1 Take Charge of Credit Cards “Get Ready to Take Charge of Your Finances” Introductory Level Objective: To identify the purpose of a credit card.

Understanding a Credit Card Take Charge of Your Finances

Chapter 7: Credit Cards and Consumer Loans Garman/Forgue Personal Finance Tenth Edition PPT slide program prepared by Amy Forgue and Ray Forgue.

Credit. What is it? – the ability of a customer to buy goods or services before paying for them, based on an agreement to pay later. Always investigate.

Using credit is a way of life. People use credit online and for everyday purposes. Some do it so they don’t have to carry cash. Some use it to buy things.

 What are advantages of credit  What are disadvantages of credit.

Chapter 4.  What is Credit? ◦ Principal + Interest  Installment Debt ◦ Equal Payments ◦ Durable Goods ◦ Longer Term = Lower Payment BUT ◦ More Interest.

Chapter 18 Responsibilities and Costs of Credit

Chapter © 2010 South-Western, Cengage Learning Credit in America Credit: What and Why Types and Sources of Credit 16.

College lesson four about credit.

Credit, Credit Cards, Scores and Compound Interest Today, you will need: Spirals, writing utensils, brains. Please, and thank you.

© 2013 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

UNIT FIVE. CREDIT: BUY NOW, PAY LATER. Coming soon to a mailbox near you: Credit Card offers.

Credit In your opinion, do consumers spend more per month on average when they use a credit card or cash?

Managing Your Money Chapter 23.

Family Economics & Financial Education 4.1.G1 © Family Economics & Financial Education – Revised October 2004 – Credit Unit – Selecting a Credit Card Funded.

Grade 12 Family Studies.  Do you have a credit card?  What is it used for?  How is it like a loan?

Understanding a Credit Card Take Charge of Your Finances

Credit Questions to Consider  What is credit?  Does credit cost?  What are the advantages of using credit?  What happens if I misuse credit?

Credit. credit is money loaned in exchange for your promise to pay it back later with interest. interest is a amount of money paid to use someone else’s.

Teens lesson seven credit presentation slides 04/09.

Credit Cards are a part of most American’s lives, but if you don’t know how to use them, they can really make your life more difficult Credit cards don’t.

© South-Western Educational Publishing Chapter 18 Responsibilities and Costs of Credit  Using Credit Responsibly  Analyzing and Computing Credit Costs.

news/video-credit-card-basics-1264.php news/video-credit-card-basics-1264.php.

Credit Advanced The Essentials to Take Charge of Your Finances In your opinion, do consumers spend more per month on average when they use a credit.

Chapter © 2010 South-Western, Cengage Learning Responsibilities and Costs of Credit Using Credit Wisely Costs of Credit 18.

HOW TO CHOOSE A CREDIT CARD. CHARGE IT! Using credit cards to pay for goods and services is a fact of life for most consumers. Yet, many consumers do.

Credit Cards. Today we will discover….. What is a credit card? Who can get a credit card and how? The features of a credit card What happens if you lose.

6-1 Chapter 6 Using Credit Cards: The Role of Open Credit.

Using Credit Chapter 6. Basic Concepts Can have an impact on attaining financial goals Can impact cash budgets Allows the acquisition of more expensive.

Family Economics & Financial Education G1 © Family Economics & Financial Education – Revised October 2004 – Credit Unit – Selecting a Credit Card.

Understanding a Credit Card

LESSON TWO: PERSONAL SPENDING

May 10 & 11 Objectives Homework Today’s Agenda

Selecting a Credit Card

Presentation transcript:

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Using Credit #6

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Q. 1. Why do we use “Credit?”

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Basic Concepts of Credit Why we use credit Avoid paying cash for large outlays

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Basic Concepts of Credit Why we use credit Avoid paying cash for large outlaysMeet a financial emergency

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Basic Concepts of Credit Why we use credit Avoid paying cash for large outlaysMeet a financial emergencyConvenience

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Basic Concepts of Credit Why we use credit Avoid paying cash for large outlaysMeet a financial emergencyConvenienceInvestment purposes

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2. What are the improper uses of credit?

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Improper Uses of Credit Meet basic living expenses

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Improper Uses of Credit Meet basic living expensesMake impulse purchases

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Improper Uses of Credit Meet basic living expensesMake impulse purchasesPurchase non-durable goods

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Important Articles Credit Card Myths – 8 myths about settling credit card debts 8 myths about settling credit card debts Bad Credit Card habits – habits-to-break-1267.php?aid=7704c6a5 habits-to-break-1267.php?aid=7704c6a5 Credit Limit – How to blow your credit without spending How to blow your credit without spending Advice on Spending – Hair-rising money tales Hair-rising money tales

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3. What are the steps in establishing “good” credit?

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1. Establishing Credit Open checking and savings accounts Get one card and make small purchases

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2. How Much Credit Can You Stand? Monthly consumer credit payments (excluding mortgage) should not exceed 20% of monthly net income. Debt Safety Ratio = Monthly consumer credit payments Monthly take-home pay

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4. What are the advantages and disadvantages of credit cards?

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Advantages A basic need in today’s society

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Advantages A basic need in today’s societyConvenience

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Advantages A basic need in today’s societyConvenienceItemized details of your expenses

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Advantages A basic need in today’s societyConvenienceItemized details of your expensesSource of funds for emergency

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Advantages A basic need in today’s societyConvenienceItemized details of your expensesSource of funds for emergencyDebt consolidation

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Advantages A basic need in today’s societyConvenienceItemized details of your expensesSource of funds for emergencyDebt consolidationReward Points

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Disadvantages Too easy to spend

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Disadvantages Too easy to spendLose track of spending

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Disadvantages Too easy to spendLose track of spendingPaying off the interest

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Disadvantages Too easy to spendLose track of spendingPaying off the interestObligating future income

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5. What are the two types of open credit accounts?

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Open credit accounts Bank credit cardsRevolving credit lines

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6. What are the basic features of a bank credit card?

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Bank Credit Cards Most popular open account credit Line of credit depends on applicant’s financial status and ability to pay Cash advances and balance transfers Interest rates and fees

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Other Fees High interestPrime rate + a percentageAnnual feesTransaction feesLate-payment feesOver-the-limit feesBalance transfer feesForeign transaction fees

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7. What are the special types of bank credit cards?

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Special Types of Bank Credit Cards Reward cardsFrequent flyer programsAuto rebate programsOther merchandise rebatesAffinity cardsSecured credit cardsStudent credit cards

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Revolving Credit Lines Open account credit offered by banks or other financial institutions Usually offer higher credit lines and lower interest rates than credit cards Access money by writing checks

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8. What are the forms of revolving credit lines?

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Forms Of Revolving Credit Overdraft protection linesUnsecured personal credit linesAvailable on as-needed basisHome equity credit linesSecured by equity in owner’s home Interest tax deductible (if deductions are itemized)

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9. What are the steps in managing your credit?

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1. Opening an account Steps in opening an account: 1. Credit card application2. Credit investigation3. Credit bureau

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2. Computing Finance Charges Truth in Lending Act: Lenders must disclose Annual percentage rate (APR) – true rate of interest over life of loan – includes all fees and costs Method used in computing finance charges

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3. Managing Your Credit Cards Review statements monthly to verify entries Pay by due date – minimum monthly payment – entire amount to avoid finance charges

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10. What are the steps in using your credit wisely?

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1. Shop Around for the Best Deal Annual fees Rate of interest charged on balance Length of grace periodMethod of calculating balances

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2. Avoiding Credit Problems Use discipline when purchasing Reduce number of cards Be selective in accepting preapproved credit Limit new charges Pay more than the minimum Pay off cards with highest finance charges first Transfer balances to card with lowest rate

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3. Credit Card Fraud Don’t give account number to organizations who call you Use secure internet sites Never put credit card info on checks Destroy old cards and shred old statementsReport lost or stolen cards immediately

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4. Bankruptcy – Paying the Price for Credit Abuse File Bankruptcy Chapter 13 - wage earner plan -- debt restructuring Chapter 7 - straight bankruptcy -- wipe the slate clean In 2010 over 1.5 million people filed for personal bankruptcy Use credit counselors!