$8: What can you get for an Hour? Credit Cards

Citibank Confessions of a Shopaholic

Definitions Annual Percentage Rate “APR”: Interest rate for an entire year. –Fixed or Variable Prime Rate: The interest rate that banks charge their most credit-worthy customers. Credit Limit: The maximum amount of credit that a bank or other lender will extend to a customer, or the maximum that a credit card company will allow a credit card holder to borrow on a single card. Credit: “Financial Trustworthiness.”

Credit vs. Debit Cards Credit Cards Pay it later Credit limits Builds credit Rewards Debit Cards Linked to your bank account Automatically deducted Helps you budget Less likely to overspend

Review of credit card offers Read the solicitation disclosures Look for: –APR – fixed or variable –Annual Fee –Rewards

2010 Credit Card Reform Changes to the terms of your credit card must be given 45 days prior to the change taking affect. Over-limit fees will be prohibited unless you consent to pay for the privilege. Credit card bills will now be due on the same calendar day every month.

2010 Credit Card Reform When you open a new account, your interest rate must stay at the opening rate for at least 12 months. Statements must be mailed at least 21 days ahead of when they are due. If you’re under 21, it will be difficult to open a new credit card account.

2010 Credit Card Reform You can “opt-out” if you don’t like the terms your credit card companies send you. Other accounts can’t be used as the basis for raising your interest rate. Restoring good payment history will lower a raised APR.

2010 Credit Card Reform Payments go towards higher interest rate balances first. It may be harder for those with bad credit to get credit. Increased protection for gift card holders.

Student Credit Cards students.phphttp:// students.php –Discover Student Card (14.99% V, No annual fee) –Citi Forward Card (17.24%V, No annual fee)

Credit Card Statistics Average interest rate among top 40 credit cards is 13.54% Total credit cards in circulation in US (as of year end 2009): million Average college senior graduates with $4,100 in credit card debt 50% of all college students have four or more credit cards