2. Credit Card Debt Holmen High School Building Wealth Mr. Sullivan

3. Credit Cards How to get a Hawaiian $6,000 vacation for $22.40!

6. Facts About High-Risk Credit Users Those who used credit irresponsibly in college were more likely to: Driven Drunk Used Amphetamines Suffered from Depression Higher Body Mass Index Lower Grade Point Average Didn’t Participate Physical Activity Didn’t Practice Safe Sex

7. The Good, The Bad, and The Ugly Imagine everything in your life being 1% cheaper Imagine receiving $5 back for every hundred dollars that you spend at your favorite stores Imagine being able to earn travel rewards, gift certificates, or cash back just by “modifying” how you handle your purchases

8. The Good, The Bad, and The Ugly Sounds good, right? It can be; however, you must learn how to use credit cards properly.

9. The Good, The Bad, and The Ugly Over the years, I’ve earned numerous flights, hundreds in cash back, and even concert tickets… All while not paying one penny in interest!

10. Credit Card Basics As you turn 18, you will begin to notice credit card offers arriving in the mail. It is important to establish good credit young. Interests rate vary from 10% to 29%

11. How Credit Cards Work Instead of paying cash for everyday transactions (gas, food, bills), you may simply “charge” your purchases. At the end of every month, the credit card company will total all your purchases and send you a bill for all your purchases

12. Credit vs. Debit Credit cards totals your purchases and sends you a bill at the end of every month Debit cards deducts your total directly from your checking account Credit cards offer you much more protection (If your card is lost or stolen)

13. Monthly Statement McDonalds $5.00 Wal-Mart$57.00 Kwik Trip$21.00 Buffalo Wild Wings$17.00 Total Balance $100.00 Minimum Balance Due: $5.00

14. Three Options Minimum Payment: Pay the minimum balance ($5.00) Partial Payment: Pay any amount between the minimum balance and the statement balance. ($5.00-$100) Full Payment: Pay the statement balance in full ($100.)

15. Option 1: Minimum Payment If you pay the minimum balance, your new balance will be: $100-$5=$95

16. Option 1: Minimum Payment Your balance of $95 will carry forward next month and be charged 19%. Next month, your credit card company will total your new charges and send you a bill….(plus the $95) You will have the same three options (minimum, partial, or full payment)

17. Option 1: Minimum Payment It is very easy to build a large credit card balance by paying the minimum balance… This is not a good idea….Credit card debt is the number two reason people file for bankruptcy!!!

18. Option 2: Partial Payment Partial payments are when you pay any amount between the minimum payment and the statement balance. In this case, a partial payment would be anywhere between $5-$100

19. Option 2: Partial Payment If you decide to pay $20.00, your new balance of $80 will be subjected to 19% interest rates. If for any reason you can’t pay the statement balance in full, make the largest partial payment you can!

20. Option 3: Full Payment If you choose to pay the $100 in full, how much interest will you pay? $0 Always do your best to pay your CC off every single month! If you can’t afford something, DON’T CHARGE IT!!!

21. Credit Card Tips Pay off your statement in full every single month!!! Do not use credit cards as a form of loans…(Cheaper loans out there) – Student Loans6% – Auto Loans7% – Personal Loans8% Don’t pay 29% if you don’t have to! Never use credit cards for cash advances!

22. Trendspotting Demetri Martin- Daily Show http://www.thedailyshow.com/watch/tue- june-26-2007/trendspotting---credit http://www.thedailyshow.com/watch/tue- june-26-2007/trendspotting---credit

23. Dylan Goes to College Dylan just graduated from Holmen High School and is attending UW-Madison in the fall.

24. He begins to notice offers for credit cards in his mailbox. Dylan applies for a credit card and is approved for a $10,000 spending limit.

25. Dylan uses his credit card to buy the following: X-Box 360 Laptop Computer Cell Phone I Pod Big Screen TV Surround Sound Moped Dinner Movies Coffee Text Books

26. Of these expenses, which one is the only “necessity?” X-Box 360 Laptop Computer Cell Phone I Pod Big Screen TV Surround Sound Moped Dinner Movies Coffee Text Books

27. Dylan eventually reaches his $10,000 spending limit, or “maxes out” his credit card.

28. If Dylan makes the minimum payment on his credit card: 1. How many years will it take Dylan pay off his $10,000 dollars? (19% Interest) 2. How much money in interest will Dylan pay over the course of these years? 23 years $21,000

29. Dylan misses one payment and his interest rate jumps to 29% 1. Now how many years will it take Dylan pay off his $10,000 dollars? (29% Interest) 2. How much money in interest will Dylan pay over the course of these years? 31 years $46,000

31. Credit Card Facts The average household receives 6 offers a month The average American has 8 credit cards The average American has $15,800 in credit card debt!

32. Credit Card Facts In 2015 credit card companies earned $98,100,000,000 in interest In 2015 credit card companies earned $61,200,000,000 in fees These amounts are more than the Gross Domestic Product (GDP) of Kuwait!!!

33. Citi ® Dividend Platinum Select ® Visa ® Card for College Students You must be 18 years of age or older You must have a valid Social Security Number You must be a college or graduate student Offers 5% cash back on many every day purchases

34. Terms of Agreement Interest Rate Grace Period Annual Fee

35. What to Look for in your First Card Low Interest Rate (Below 15%) No Annual Fee Rewards, Cash Back, or Free Travel

36. What Not to Put on Your Credit Card “Big Ticket Items” Big Screen TV’s Expensive Electronics Travel Tuition Anything you cannot payoff right away!!!

37. What to Put on Your Card – Gas – Utilities Bills – Groceries – Text Books – Any necessary expenses you can afford buy

38. Do’s and Don’ts of Credit Cards Do Pay off your credit card every month Check your statement every month for accuracy Call your credit card company and ask for a lower rate Don’t Use your credit card to buy things you can’t afford Make the minimum payment each month Get more credit cards to pay off existing debt!!!

39. Building Credit If you don’t use your credit cards responsibly, it could come back to hurt you in the following ways: Higher rates on loans (Car, House, Personal) Denied Employment Loan Applications Denied Difficulty Getting Approved for Apartment Difficulty Getting Cell Phone Contracts Calls from Debt Collectors

40. Actual Facebook Post

41. CreditKarma.com

42. Top 5 Sneaky Credit Card Tricks 1. Domino Effect- Missing a payment on any card or any bill, and your rate will jump to 29% – Even applying for a car loan or house loan could affect your interest rate! 2. Fixed rates aren’t fixed- They can raise your rate anytime…THEY DON’T EVEN NEED A REASON…(15 days notice)

43. Top 5 Sneaky Credit Card Tricks 3. Getting “dinged” overseas- 1%-3% charge on all expenses overseas 4. Balance Transfer Scams- Credit cards will always pay off the lowest interest rates first! 5. Paying an Annual Fee- There is no purpose for paying an annual fee.

44. Checking for Understanding How much should you pay on your credit card each month? Name one item you should not put on your credit card? Name one item you can put on your credit card? Name one way that a bad credit score can affect you?