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Credit/Debit Cards Consumer Math

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Overview Differences between credit and debit cards Best Uses Fees with both Best Credit Cards – Credit – What do you want? 4

Differences (Credit vs. Debit) Credit Cards Born 1950’s Borrowed Money More likely to overspend Companies want you to! APR Federal protection from theft Rewards Build Credit Debit Cards Born 1970’s Linked to bank account Less likely to overspend Overdraft Protection (APR) Vendors get your money immediately Does not build credit 5

Debit Card Protection With a stolen DEBIT card (or debit card number and PIN), you are protected as follows (source: Federal Reserve and Federal Trade Commission): – Loss is limited to $50 if reported within 2 business days – Loss is limited to $500 if reported between 2 business days and 60 days after statement is mailed out – Loss is unlimited if you fail to report theft after 60 days statement is mailed to you plus maximum overdraft line of credit, if any. 6

Best Uses (Credit vs. Debit) Credit Card – Big Ticket $$ Item – Rent Hotel/Car (Blocking Debit Card) – Keep $$ in a high % savings account and pay on time Debit Cards – If you struggle to pay bills on time – Never opt in for overdraft protection – Use PIN at ATMs (cover hand/buttons) – Don’t share PIN Cash – Smaller Purchases (12-18% less than plastic) 7

Fees (Credit vs. Debit) Debit – POS: Point of Sales Fee ($1) – Overdraft Fee Credit – Annual Fee (Better Rewards/Protection) – Interest (if you don’t pay on time) – Vendor fee (3%) 8

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Best Credit Cards Requirements – Credit Score – Annual Fee What do you want? – Low interest – Cash Back – Travel – Rewards – Security 12

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Disputing a Charge 12/1815 Retrace Your Steps Call The Credit Card Company ASAP Put In Writing Keep On Paying Follow-up

Cool Watches HYT H1 Hydro Watch Urwek UR Urwek UR Harry Winston Opus Eleven 16

Credit Card Payments How Long to Pay Off with Minimum Payment 17

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Protection From Fraud Fraud: obtain goods without paying, or to obtain unauthorized funds from an account – Name of card holder – Account Number – Expiration Date – Verification/CVV code 21

Penalties The penalties for felony credit card theft or fraud are: – < $1,500 in theft = $500 - $4,000 Fine (Misdemeanors) – 6 months – 2 years prison (for theft of 5 stolen cards or a value up to $50) – years for up to 10 cards or a $10,000 value – Up to 20 years for up to 50 cards or a $200,000 value – 5 to 99 years for 50 cards or a $200,000 value. – Each violation carries fines of up to $10,000. Any sentence may also include restitution. 22

Credit Card Fraud

Prevention Tips 1.Never let card out of sight – watch handlers! 2.Never click links prompting you to check online/offline accounts 3.Payment websites should be https not http 4.Check monthly statements immediately and carefully 5.If you miss credit card bill, call company ASAP 6.Always shred old bills and cards 7.Notify CC company when you move 8.Don’t fall for update information scam 9.Never transmit CC information over 24