BLU # 19: Charge it! What’s the difference between debit and credit?

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Presentation transcript:

BLU # 19: Charge it! What’s the difference between debit and credit? Can you charge items without paying interest? Does using your credit card build credit? What’s the average interest rate on a savings account? What’s the average interest rate on a credit card?

My 1st credit card! New laws: can’t get a credit card until you’re 21 unless your parents co-sign Why would they pass such a law?

Getting the best card Capital One Visa Citi Forward APR Cash Advance APR Annual fee Late pmt fee “Perks” Which card is a better deal? Fill in the chart & then answer the question in your opinion & explain your answer.

Grace Period Length of time between when you buy an item & begin to pay interest on it You can buy something on Monday, pay it off on Saturday and pay zero in interest Paying bills on time helps build good credit

How credit card interest works…. Minimum payments on cards are usually 2% of total So, if you owe $10,000 and pay the minimum ($200) per month…. http://www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx

VS. But, if you are in a bind … Credit cards are better than pay day loans, cash calls, etc….. VS.

Loan Amount Loan Fee APR # of payments Total Cost $5,000 $75 84 Payment amount Total Cost $5,000 $75 116.47 84 $486.58 $2,525 139.22 47 $294.46

Thinking time… What is an advantage of having a credit card? What is a disadvantage of having a credit card? What’s an advantage of using a debit card? What’s a disadvantage? Why might it be a disadvantage to have a credit card with a spending limit of $50,000? When you turn 21 will you get a credit card? Explain.