The Secret History of Credit Cards

Slides:

Advertisements

Similar presentations

CREDIT Chapter 16.

Advertisements

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

Understanding Loans and Borrowing Money. Development of Credit  In the Past  Credit Today.

Unit 4 - Good Debt, Bad Debt: Using Credit Wisely PG 73.

Personal Finance Chapter 16

 Outstanding money owed by consumers  Examples  Credit Card Debt  Student Loans  Mortgages.

1. What is Credit and What is Debt? 2. Using Credit: The Rewards & Risks 3. Four Types of Debt 4. The Cost of Using Credit 5. Running the Numbers.

Grade 12 Family Studies. B6I.

Understanding Your Credit Card.  More than eight percent of American households owe more than $9,000 on their credit cards.  The average college student.

Borrowing Basics 1. 2 Purpose Borrowing Basics: Describes how credit works and the types of credit available. Helps you determine if you are ready to.

Credit Cards. Credit WHAT IS CREDIT? $ It is a loan $ It is an agreement $ It comes with fees, interests & other charges Credit is a debt; it is NOT income!!!

Payday Loans & Credit Cards CENTS. What is a Payday loan?  A Payday loan is a small loan, also known as a “cash advance.” These loans typically become.

PERSONAL FINANCE IVERSON Revolving Credit. Credit Cards Credit Cards allow you to borrow money from a bank each time you use your card so that you can.

Bennie Waller – Longwood University Credit Cards Bennie Waller Longwood University 201 High Street Farmville, VA Much of this material from fefe.arizona.edu.

Credit Card © Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 1 Funded by a grant from Take.

Credit: Helpful or Hurtful. Fact or Fiction Q. Using credit can lead to serious problems. A. True.

Personal Finance Spring  Allows the user to buy goods based on the promise that they will later pay for the goods  Issuers give users access to.

Credit. Bell Ringer 1.Is a credit card good or bad? 2.What would be considered good credit? 3.On average how many credit cards does the average household.

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.

CreditUnitReview JEOPARDY Consumer credit The use of credit for personal or individual needs.

 Buying on credit = buy goods and services now and pay for them later (usually with interest)  Having credit depends on the suppliers’ confidence in.

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

Chapter 16 Credit in America

Going Into Debt $$$. Americans & Credit Credit allows people to own homes, improve their communities and purchase other items instead of waiting. Credit.

Standard SSEPF4 – The student will evaluate the costs and benefits of using a credit card. SSEPF4a- List factors that affect credit worthiness.

© 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.

Topic 6: Borrowing Money Wealth Management Mrs. Schroeder.

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

Credit What YOU need to know!. What is Credit? Credit is borrowing money now to make an immediate purchase and promising to repay it later.

Unit 4 Part 2: Credit Cards What You Need To KNOW.

Going into debt.  Credit- The receiving of money either directly or indirectly to buy goods and services today with the promise to pay for them in the.

Using credit is a way of life. People use credit online and for everyday purposes. Some do it so they don’t have to carry cash. Some use it to buy things.

Chapter 4.  What is Credit? ◦ Principal + Interest  Installment Debt ◦ Equal Payments ◦ Durable Goods ◦ Longer Term = Lower Payment BUT ◦ More Interest.

Loans Presented by S. Cox. Objectives  Describe the different types of loans  Explain the types of financing assistance provided to businesses.

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

Going Into Debt Chapter 4. Americans and Credit Chapter 4, Section 1.

© 2013 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

UNIT FIVE. CREDIT: BUY NOW, PAY LATER. Coming soon to a mailbox near you: Credit Card offers.

CHAPTER 4 Going Into Debt. Debt = Principal + Interest Credit  Receiving money either directly or indirectly to buy goods and services TODAY with the.

Jeopardy Begins with c Loans Poor credit Consumer Credit consumer Finance Q $100 Q $200 Q $300 Q $400 Q $500 Q $100 Q $200 Q $300 Q $400 Q $500 Final.

Shopping for an Automobile Loan What Do I Need to Know? Using Financial Calculators.

Consumerism UNIT IV. Disposable and Discretionary Income Consumer- a person or group who buys or uses goods and services to satisfy needs/want Disposable.

Credit Credit: borrowing money to pay for something now while promising to repay it later. Lender: the person loaning the money Borrower: receives the.

Grade 12 Family Studies.  Do you have a credit card?  What is it used for?  How is it like a loan?

Chapter  Open-ended credit – An agreement to lend the borrower an amount up to a stated limit and to allow borrowing up to that limit again, whenever.

CREDIT Personal Finance. Advantages of Credit  Improved Standard of Living:  Credit lets you purchase items now, instead of having to wait until you.

Chapter 4 Going into debt.

Using Credit Wisely Costs of Credit RESPONSIBILITIES AND COSTS OF CREDIT.

© 2010 South-Western, Cengage Learning Chapter © 2010 South-Western, Cengage Learning Credit in America 16.1 Credit: What and Why 16.2Types and Sources.

Responsibilities and Costs of Credit

© South-Western Educational Publishing Chapter 18 Responsibilities and Costs of Credit  Using Credit Responsibly  Analyzing and Computing Credit Costs.

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

Using Credit Wisely. Credit  Credit is a sum of money a person can use before having to reimburse the credit lender.  It allows a person to receive.

Personal Finance Section Credit and Debt. Personal Finance Section Credit gives extra punch to your purchasing power; but reckless handling of credit.

Chapter © 2010 South-Western, Cengage Learning Responsibilities and Costs of Credit Using Credit Wisely Costs of Credit 18.

Unit Four Good Debt, Bad Debt: Using Credit Wisely.

HOW TO CHOOSE A CREDIT CARD. CHARGE IT! Using credit cards to pay for goods and services is a fact of life for most consumers. Yet, many consumers do.

NO Credit If an individual has not used credit, they will not have any information in their credit report Not having a credit report can cause an individual.

© 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.

Good Debt, Bad Debt: Using Credit Wisely Good Debt, Bad Debt: Using Credit Wisely NORTH DAKOTA PERSONAL FINANCE EDUCATION.

Consumer Economics Credit Credit Investing Investing.

Going Into Debt Chapter 4 - Economics. What is Credit? Receiving Funds to buy goods with the promise to pay funds back Allows middle class to purchase.

Credit cards discussion

MYPF 16.1 Credit: What and Why 16.2 Types and Sources of Credit

Understanding Credit Cards

Standard SSEPF4 – The student will evaluate the costs and benefits of using a credit card. SSEPF4a- List factors that affect credit worthiness.

MYPF 16.1 Credit: What and Why 16.2 Types and Sources of Credit

Presentation transcript:

The Secret History of Credit Cards Mrs. Sylva Economics

What do you know about credit cards? How do they work? How many credit cards would you think the average person uses? Why do you think people have more than one credit card?

Terms to Know… Credit Receipt of money either directly or indirectly to buy goods and services in the present with the promise to pay for them in the future. Principal Amount originally borrowed

Terms to Know… Interest "A charge for a loan, usually a percentage of the amount loaned" vary widely, both for one individual’s account and for the industry at large. Interest rates for credit cards can change with 15 days notice to the cardholder. Annual Percentage Rate (APR) Cost of credit expressed as a yearly percentage (includes noninterest costs)

Terms to Know… American Bankers Association (ABA) Represents banks of all sizes on issues of national importance for financial institutions and their customers. Promote the strength and profitability of the banking industry. Bankruptcy "A legal proceeding that relieves you of the responsibility of paying your debts or provides you with protection while attempting to repay your debts.“

Terms to Know… Deadbeat Normally means "one who does not pay one's debts," For credit card companies, "deadbeat" means someone who avoids interest and fees by paying her/his account balance in full each month

Terms to Know… OCC (Office of the Comptroller of the Currency) An agency of the U.S. Dept. of the Treasury Responsible for overseeing credit card policies

Terms to Know… "Revolver:" a customer who does not pay her/his balance in full each month. Customer fees and interest fees generate income for the credit card companies. About 90 million Americans do not pay their bills in full each month and carry balances on their credit cards. Average balance is $8000.

Terms to Know… "Universal default:" Communication among lending institutions means that a late payment on any debt may lead to a consumer being declared in "universal default," which can lead to an increase in fees and interest on all outstanding debts, even those on which the consumer’s payments are up to date. Usury: An excessive or illegally high rate of interest charged on borrowed money.

Questions to Answer… Answer the following questions after watching the video: 1. What information in the documentary most surprised you? 2. Do you think the government should have a role in regulating both who can get credit cards and what interest and fees consumers should pay? If so, who should be the regulators? Who would benefit from such regulation? Who would lose? Explain.

Questions to Answer… 3. How, according to the four "normal consumers" in the documentary, does owning a credit card or credit cards affect purchasing decisions? 4. Who loses and gains the most from credit card companies’ policies? Explain. 5. Has the documentary influenced how you might use credit cards in the future? Explain.

The Video…. http://www.pbs.org/wgbh/pages/frontline/shows/credit/view/

The Cost of Credit Figure out how much repaying an $8000 credit card debt will cost at interest rates of 12 percent, 19 percent and 29 percent: a) With only the required minimum monthly payment b) With a fixed payment of $250 c) With a fixed payment of $500 Calculator

The Cost of Credit Imagine that you have used a credit card to buy $900 in gifts for friends and family. Using the link below, calculate your repayment schedule. Click for Cost of Credit Worksheet2 http://aol1.bankrate.com/aol/calc/MinPayment.asp?nav=cc&page=calc_home

Checklist for Buying on Credit Do I really need this item? Can I postpone the item until later? If I pay cash, what will I be giving up that I could buy with this money? If I borrow or use credit, will the satisfaction I get from the item I buy be greater than the interest I must pay?

Checklist for Buying on Credit Have I done comparison shopping for credit? Can I afford to borrow or use credit now? Do I know how much it will cost me?

The Credit Card: Best Friend or Foe? Click the link below to watch a 1-minute video. http://articles.moneycentral.msn.com/video/default-ap.aspx?cp-documentid=d841dd9a-9375-4ee7-853c-16bae04c6a46&from=cp_en-us_Money_video_default&fg=MSNmoney

New Credit Card Laws (Signed into law on 5-22-09) Click the link below to watch a 1-minute video. http://articles.moneycentral.msn.com/video/default-ap.aspx?cp-documentid=d841dd9a-9375-4ee7-853c-16bae04c6a46&from=cp_en-us_Money_video_default&fg=MSNmoney

New Credit Card Laws (Signed into law on 5-22-09) Limited interest rate hikes Mandatory 45-days advance notice of change No universal default More time to pay monthly bills Highest interest balances paid first Limits on over-limit fees (must opt-in) No more double-cycle billing Lower sub prime fees Disclose minimum payments consequences Source: http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/What-the-new-credit-card-law-means-for-you.aspx

The End… Summarize your Cornell notes Due next class

Let’s Review (Post answer online in the forum due 9/16) Credit Cards Ahas & Huh? Should you have a credit card or not? Why or why not? What are some things to keep in mind if you have a credit card? How can you use a credit card responsibly and wisely?