Credit & Debit Cards Personal Finance Mrs. Brewer

Let’s Go Shopping…. Log on to the Internet Find something you just HAVE to BUY! Anything you want!

Things to Buy…

How Can I Pay for It?? Credit Card ◦ Plastic ◦ Make Purchases without cash in hand ◦ Future Payment ◦ With Interest Debit Card ◦ Plastic ◦ Make Purchases without Cash in hand ◦ Funds must be available in checking or savings account

Advantages & Disadvantages Credit Card ◦ Funds available to make purchases ◦ Don’t have to carry a lot of $$ ◦ Pay interest on purchases ◦ More convenient ◦ No pin # needed ◦ If lost or stolen not responsible for all purchases ◦ Rewards for using the card Debit Card ◦ NO INTEREST ◦ Funds need to be available ◦ Usually need a pin # ◦ Need to track purchases and amount of $$ spent ◦ Readily available to use ◦ Don’t have to carry a lot of $$ ◦ Card # can be stolen and used without your knowledge

Credit Card Video

Student Credit Cards Who is eligible? What card would you pick?

Terms & Abbreviations APR = Annual Percentage Rate V = Variable Annual Fee = the amount charged by the credit card company for you to have the card.

Terms & Abbreviations, cont… Cosigner = an additional person who agrees to have equal liability for the credit card debt. Creditworthiness = having an acceptable credit rating.

Terms & Abbreviations, cont… Balance Transfer = the transfer of debt from one credit card to another. Prepaid Debit Card = a plastic card that acts like an electronic wallet. Like prepaid gift cards.

Let’s use the online credit card payment calculator….

Purchase Example $1, item 18.50% APR $25.00 minimum payment

Results!! 63 months to pay off purchase $ paid in interest So…5 years and $1, later…

Was it worth it??