Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 1 Chapter 12 Business and Consumer Loans Section 1 Open-End Credit and Charge Cards.

Slides:

Advertisements

Similar presentations

Credit Cards Avoiding the Credit Trap. Credit Cards Credit cards are a good way to build credit, if used wisely Receive monthly statements. Can be mailed.

Advertisements

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

Credit and Credit Cards

CREDIT Chapter 16.

Credit. Lending Institutions Banks Mortgage Companies Finance Companies Credit Unions Insurance Companies Brokerage Companies U. S. Government Check Advance.

5.01 Understand credit management.

Your Money and and Your Math Chapter Credit Cards and Consumer Credit

Section 1.1, Slide 1 Copyright © 2014, 2010, 2007 Pearson Education, Inc. Section 8.3, Slide 1 Consumer Mathematics The Mathematics of Everyday Life 8.

CHAPTER 9 SEC 3 Consumer Loans. What is a consumer loan? Def.  a loan that establishes consumer credit that is granted for personal use; usually unsecured.

Garman/Forgue Personal Finance Ninth Edition Chapter 7 Credit Cards and Consumer Loans.

Consumer Banking Dollars and Sense. Interest Rates – Rules of Commercial Banks – Interest rates charged for loans higher than Savings Banks and interest.

Shopping for a Credit Card. Shopping for A Credit Card Comparison shop credit cards Don’t take the first offer that comes to you: –Pre-approval Means.

Costs of Using Credit And Types of Credit Credit.

Lesson 8 Getting a Credit Card. Key Terms APR Credit Credit Card Creditor Debtor Finance Charge Interest Rate Introductory Rate Late Fees Minimum Payment.

Personal Finance Chapter 16

CARL JOHNSON FINANCIAL LITERACY JENKS HIGH SCHOOL Credit Cards – More Than Plastic.

HOW CREDIT CARDS WORK What you need to know about credit cards- including what credit cards companies can and can’t do, and what information they have.

SECTION 2: WHAT IS CREDIT Unit 6: Credit. I Can: Differentiate Credit Cards from Debit Cards Describe the importance of APR Define and apply: credit limit,

1 Business Math Chapter 12: Consumer Credit. Cleaves/Hobbs: Business Math, 7e Copyright 2005 by Pearson Education, Inc. Upper Saddle River, NJ All.

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

Chapter 8 Managing Your Credit. Copyright ©2014 Pearson Education, Inc. All rights reserved.8-2 Chapter Objectives Describe the key characteristics of.

TYPES AND SOURCES OF CREDIT Money Management II. What We’re Doing Today Closed-End vs. Open-End Credit Loans  Different sources for different uses Credit.

Going Into Debt Americans and Credit. What is Credit? Credit: is the receiving of funds either directly or indirectly to buy goods and services now with.

Credit Receiving something now and promising payment at a later time. Principle: Actual cost of the good or service. Interest: Amount paid for the use.

Simple Interest And Methods of Payment. * Whenever money is borrowed, the borrower (an individual, organisation or community) pays the lender (a bank.

Credit Fundamentals Chapter Using Credit Two parties involved: 1.Debtor – Anyone who buys on credit or receives a loan 2.Creditor – The one who.

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

CREDIT: Day 2. Types of Credit Credit Cards Loans.

Chapter 16 Credit in America

Interest on Loans Section 6.8. Objectives Calculate simple interest Calculate compound interest Solve applications related to credit card payments.

Section 7-3 Computing the Costs of Credit

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.

Credit Cards and Consumer Loans

CREDIT VOCABULARY.  Credit = a promise to pay in the future for an item you purchase today.  Finance charge = the cost of using credit. This is usually.

CREDIT IN AMERICA.  Credit –  Over ______ of all purchases in the U.S. are made on credit.  What do you buy with credit?

Credit Cards Plastic Money!. Credit Cards 90% of credit card purchases are impulse purchases! Only 54% of card owners pay off their balances each month!

Reading a Credit Card Statement

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.

Charge It Right 1. 2 Purpose Charge It Right will teach you about credit cards and how to use them responsibly.

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

Consumer Loans © 2010 Pearson Education, Inc. All rights reserved.Section 9.3, Slide Determine payments for an add- on loan. Compute finance charges.

Understanding Cash, Credit & Checks Economics in Action.

Credit Cards. 88 million American households have credit cards Average credit card debt is $9,600 per household.

Chapter 7 – Credit Card Math

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 1 Chapter 12 Business and Consumer Loans Section 5 Real Estate Loans.

© SOUTH-WESTERN EDUCATIONAL PUBLISHING LESSON 16.1 UNIT 6 WHAT IS CREDIT? DESCRIBE HOW CREDIT DEVELOPED IN AMERICA. DEFINE BASIC CREDIT VOCABULARY. DISCUSS.

(The Nightmare Continues…).  Open-Ended Installment Loans differ from Fixed Installment Loans in a number of ways: ◦ They are often referred to as “revolving.

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

Bell Ringer Do you think having a credit card is a good or a bad thing? Why or why not?

Chapter 4, Section 2 Credit Card Finance Charges.

THE NATURE OF FINANCIAL MANAGEMENT Copyright © Cengage Learning. All rights reserved. 11.

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.

Responsibilities and Costs of Credit

Getting a credit card. © Family Economics & Financial Education –Updated April 2009– Credit Unit – Understanding a Credit Card Funded by a grant from.

Teens lesson eight credit cards presentation slides 04/09.

CREDIT. The Need for Credit  Credit is buying now and paying later  Today 80% of purchases are made with credit  Qualifying for Credit  Income- Money.

© Take Charge Today – August 2013 – Understanding Credit Cards – Slide 1 Funded by a grant from Take Charge America, Inc. to the Norton School of Family.

Borrowing Wisely Senior Advisory Week of May 23, 2016.

Copyright © 2017, 2014, 2011 Pearson Education, Inc. All Rights Reserved Personal Finance SIXTH EDITION Chapter 8 Managing Your Credit.

Chapter 16 Credit in America. What is Credit?  Money borrowed to buy something now, with the agreement to pay for it later  Over 80% of all purchases.

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

Personal Financial Management

Types of Credit.

Section 13-2 Consumer Credit.

Money Management Chapter 16

Sources of consumer credit

Business and Consumer Loans

Selecting a Credit Card

Chapter 7 Credit Cards.

© 2008 Pearson Addison-Wesley. All rights reserved

Presentation transcript:

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 1 Chapter 12 Business and Consumer Loans Section 1 Open-End Credit and Charge Cards

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 2 Open-End Credit Open-end credit– has no fixed payments, customer makes payments until balance is paid off: store charge accounts and charge cards, Mastercard, Visa Credit limit– maximum amount that may be charged on the account; based on income, assets, other debts, and credit history

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 3 Debit Card A sale paid for with a debit card authorizes the retailer’s bank to debit the purchaser’s checking account immediately upon receipt. Debit cards do not involve credit since their use results in an immediate debit, or withdrawal of funds, from an account.

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 4 Revolving Charge Accounts Itemized billing – statement of purchases, payments, refunds, and finance charges made each month Finance charges – interest charges, time-payment differential, or carrying charges Grace period – time frame for which no interest is charged if paid in full by the end

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 5 Revolving Charge Accounts Late fees – fee assessed for payments received after the due date Over-the-limit fees – charged by lender when borrower charges more than an approved maximum amount of debt.

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 6 Use the Unpaid Balance Method Calculates finance charges based on the unpaid balance at the end of the previous month Purchases or returns during current month are not used

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 7 Page 467 Quick Check 1

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 8 Use the Average Daily Balance Method Most revolving charge plans now calculate finance charges using the average daily balance method The balance owed on the account is found at the end of each day during a month or billing period All of these amounts are added

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 9 Use the Average Daily Balance Method That total is divided by the number of days in the month or billing period. The result is the average daily balance of the account This is used to calculate the finance charge

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 10 Page 473 Exercise 18

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 11 Example (cont) Step 1 Multiply each unpaid balance by the number of days for that balance. Step 2Total these amounts. Step 3Divide by the number of days in that particular billing cycle (month).