By Mr. Butka Belleville High School. Why do you think it matters what sort of credit history/rating a person has? 5 sentence minimum.

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Presentation transcript:

By Mr. Butka Belleville High School

Why do you think it matters what sort of credit history/rating a person has? 5 sentence minimum

 The practice of buying goods / services now and paying for them later  One form is a loan: borrowed money paid back with interest.

 Character ◦ Past history of paying bills  Capacity ◦ Income level / ability to payback  Capital ◦ Assets (liquid and non-liquid) ◦ Collateral ◦ What you can offer as insurance to the lender ◦ Cosigner  Conditions ◦ Current economic status

Credit ScoreDescription Excellent score. The lender will offer you their best interest rate Great score. There won't be any trouble in getting a loan at good interest rate Good score. There won't be any problem in getting a loan at good interest rate Fair score. You may qualify for the loan but not at good interest rates Poor score. You may qualify but the interest rates will be very high Very poor score. It's doubtful that you may qualify for the loan, and if you qualify, the interest rates will be extremely high.

 Limited Credit Card  Bills  Bank Account  Debit Card  MSN Tips for Parents MSN Tips for Parents

 Annual Fee: The amount you have to pay annually for membership (not all do this)  Interest Rate: The Annual Percentage Rate, the rate may be variable or fixed.  Grace Period: Period from bill to due date.  Minimum Payment: Variable or fixed.  Credit Limit: Maximum amount you can charge.  Other Fees: Late fees, overcharge, etc.  Bonuses: Incentive for you to use the card.

 This site is a great calculator for credit chargessite

 Understand Credit Card Statement Understand Credit Card Statement  Money Skills Money Skills  Beware Debit Card Holders!Debit Card  Feel free to create an informative presentation ;PowerPoint, Impress, or other Digital means, covering any topic of interest on these sites. (extra credit)

 The following changes that you/your parents will see on their credit card statement  45 days notice if your interest rate will increase or if it makes changes in annual fees, late fees or other charges.  Caveat! Unless APR is set on a variable rate (e.g. index, or fed rate)

 Suppose you have offers from three credit card companies. Company A offers a fixed APR of 12% and an annual fee of $ Company B has no annual fee and offers an introductory rate of 9% which rises to 19% after 3 months. Company C offers a fixed APR of 15% with an annual fee of $ If you intend to pay off the balance each month which of these offers is best for you?

 Bring your text book  Budgets & You!