1. Credit Card Basics

2. What is a Credit Card? credit card A credit card, such as Visa or MasterCard, allow you to pay for products or services by borrowing money. This money is paid back, with interest, each month until your debt is paid off.

3. Advantages of Using a Credit Card They allow you to make purchases without carrying around cash They make it easy to order products online They allow you to pay for large purchases over time Helps establish credit which will be good later when you buy a car or house Some credit cards give you cash back for using them

4. Disadvantages of Using a Credit Card The ease of use combined with impulse buying may result in overspending High interest rates make the cost of your purchases even higher than if you paid for them cash If your credit cards are stolen, it may take months to get things straightened out

5. What is a Interest? InterestInterest is a fee that is added to the amount of money you borrow from a credit card company. If you buy something on a credit card for $100.00, the interest rate could be 25%. That means the cost to borrow $100.00 may actually cost you $125.00* or more** in a year! *If you didn’t make a payment for that year. **By not making payments, you will have to pay additional fees beyond what you borrowed as well as the interest.

6. What are Fees? FeesFees are how credit card companies make money off of you. Some of the most common fees include: Application fee Annual fee Cash advance fee Going over your credit limit Late fee Finance charge (interest) Returned check fee

7. Sample Credit Card Offer INTEREST RATES AND INTEREST CHARGES Annual Percentage Rate (APR) 14.75% This APR will vary with the market based on the prime rate. Balance Transfer APR 14.75% This APR will vary with the market based on the prime rate. Cash Advance APR 19.27% This APR will vary with the market based on the prime rate. Overdraft Advance 19.27% This APR will vary with the market based on the prime rate. Penalty APR If you are late on a payment, exceed your credit limit, or bounce a check to us, your new APR will be 29.99% FEES Annual Membership Fee$30 per year Late Payment Fees $15 if the balance is less than $100; up to $25 if the balance is $100 to less than $250; up to $35 if the balance is $250 or more. Over the Credit LimitUp to $35 Return PaymentUp to $35 Return CheckUp to $35

8. Average American Income

9. Financial Management Training 84% of college students indicated they needed more education on financial management topics. In fact, 64%would have liked to receive information in high school. (Source: Sallie Mae, "How Undergraduate Students Use Credit Cards," April 2009)

10. Statistics The average interest rate is about 15.82% A.P.R. (Annual Percentage Rate) As of 2008, the average number of credit cards Americans have is 3.5 The average credit card debt per borrower in the U.S. is $4,996 in 2012

11. The Cost of Time Let’s say you owe $3,000 on a credit card with a 15% interest rate Over 4 ½ years to pay off your credit card If you make the minimum payment of $75, it would take Over 4 ½ years to pay off your credit card!

12. Credit Card Debt Illustration http://www.youtube.com/watch?v=Vz05A6cP6Iw Running Time 3:24

13. Credit Card Tips Ask yourself, “Do I really need this?” Make more than the minimum payment Avoid reaching the credit card limit. Keep a portion of your credit limit for emergencies Late fees may also put you over your credit limit and raise your rates

14. Ignore the Free Checks They aren’t free. They are almost the same as a cash advance. Interest accumulates immediately

15. Say No to Skip Payments Usually occur before or after holidays Interest is still being added to your balance

16. Stop Using Credit Paying off your balance is difficult if you keep adding to it. Use your debit card or cash instead

17. On Your Own