1. CREDIT CARD VOCABULARY, APPLICATIONS, AND TERMS & CONDITIONS Money Management II

2. What We’re Covering Today More vocabulary related to Credit Cards! Different ways to apply for credit cards Reading and understanding your Terms & Conditions

3. Credit Card Vocabulary Average Daily Balance: Method by which most credit cards calculate the finance charges for the period. It is found by adding each day’s balance and then dividing the total number of days in a billing cycle. The average daily balance is then multiplied by the monthly periodic rate to determine the finance charges.

4. Credit Card Vocabulary Annual Percentage Rate (APR): The cost of credit on a yearly basis. It is expressed as a percentage. Lenders are required by law to disclose the APR. Balance Transfer: The process of moving unpaid credit card debt from one issuer to another. Often comes with a fee of some form.

5. Are We Still Doing Vocab? Cash-Advance Fee: A charge by the lender for using the credit card to obtain cash. Can be a flat rate or percentage (2%/$10). Cardholder Agreement: The written statement provided to the cardholder outlining the terms and conditions. Required by Federal Reserve regulations. Must include the APR, monthly minimum payments formula, annual fee and cardholder’s rights in billing disputes.

6. More Vocabulary Minimum Payment: The minimum amount a cardholder can pay to keep the account from going into default. Over-the-limit fee: A fee charged for exceeding the credit limit on the card. Pre-Approved: When a potential customer has passed a preliminary credit-information screening. Does not guarantee a line of credit.

7. Vocabulary Coming Out Your Ears Secured Card: A credit card that a cardholder secures with a savings deposit to ensure payment of their outstanding balance if the account defaults on payment. Used by people new to credit, or those who are attempting to rebuild their credit. Teaser Rate: Also known as the introductory rate, a below-market interest rate offered to entice customers to switch lenders.

8. Always Room for J-E-L-L-O! Variable Interest Rate: An interest rate that changes periodically based on changes in other interest rates.

9. Applying For a Credit Card Applying for a credit card seems to get easier and easier every day. There are multiple ways to apply including:  In person, at a financial institution  In person, through a promotional event Sporting Events Welcome Week on Campus  By telephone  Traditional snail mail  Online

10. Terms and Conditions The terms and agreement of a credit card outline all of the specifics of your relationship with the creditor. This includes:  Finance charges  Due dates  Specific lending policies  Much, much more! The terms are set by the creditor and legally agreed upon by the cardholder upon card use. The terms and conditions are subject to change, at the lender’s discretion.

11. Wrap Up and Review There’s a lot of vocabulary associated with credit and credit cards! There are multiple ways to apply for a credit card. As time passes, creditors will no doubt find new ways to make it possible to apply for credit. The terms and conditions of a credit card contain valuable information, vital to understanding your agreement with the creditor.