1. Do Now: Credit Cards
In 3-5 complete sentences, explain what you know about credit cards.

2. Interest And Credit Cards
Objective: Describe and analyze credit card offers, stocks, & describe banking.

3. What is credit?
Credit: agreement in which a borrower receives something of value now and agrees to repay a lender at a future date with interest

4. Interest
Interest: the price you pay for borrowing money (a percentage of what you borrow)
Annual Percentage Rate (APR): yearly rate of interest you pay on an unpaid credit card balance
Different transactions = different APRs (purchase, cash advance, penalty, introductory)

5. Interest Example
A card has an APR of 13%, as well as a $10 late fee and a 2% minimum payment plus interest.
Interest:
.13/12 months = % interest for the month
x $1,500 = $16.25
Minimum Payment:
.02 x $1,500 = $30
If you paid late…. for this card, the minimum payment will be 2% of the balance + the interest + the late fee.
$30 + $ $10 = $56.25
You would at least need to pay $56.25 to keep your account in good standing.

6. Visa, MasterCard, Discover, & American Express
Major payment systems in the credit card industry
Lenders use these payment systems to facilitate credit card purchases
They make money by processing transactions between point of purchase and your bank
Nothing to do with interest rates, rewards, or fees (that is the lender)
Networks add perks like fraud, car rental insurance, travel insurance, purchase protection

7. A credit Score Part of what lenders use to evaluate your “risk level”
Determines your loan amount and interest rate
Credit reporting agency – collects information and provides credit information (Equifax, Experian, TransUnion)
FICO - takes credit information and creates scores that help lenders predict behavior
Scores range from 350 to 850
Your score will most likely start in the 500s-600s

8. How a Credit Score breaks down

9. Being a savvy credit card user
Spend only what you can afford
Pay off your balance (or keep it very low)
Pay bills on time
Pay more than the minimum due
Avoid taking cash advances
Review your monthly statements
Use them only to build up credit history
DO NOT:
Live beyond your means
Roll-over your balance
Pay only the minimum payment
Get more than three credit cards

10. How to Build Credit Get a job! Open a checking or savings account
Pay all of your bills on time
Understand credit and how it works
Avoid getting a credit card until you are older
Apply for a store credit card or a secured credit card
WHAT NOT TO DO…
Pay your bills late
Apply for too many credit cards or loans in a short period of time
Pay your taxes!
These mistakes stay on your credit report for 7 – 15 years!

11. Begin Trading!!! If you are partners, share one account
You can only have $5,000 in your cash account
We will trade on Mondays, but you can trade any time of the week
Go to msbuterawghs.weebly.com
Gov/Econ Resources
Stock Trading – follow instructions & use link to join game for your period
Use your first name(s) and last initial(s) as user name Example: Michelle B.

12. Future Trading
We will trade once a week, but you can trade before that on your own time if you want to
When you trade:
Write the name of the company you bought or sold
For each trade, provide TWO reasons why you chose to by or sell the stock
You must trade (buy AND sell) at least once a week

14. Examining credit card offers
Complete the scenario questions
Examine at least four credit card offers
Complete the table for each offer
Compare the offers and determine which would be best for you (write one paragraph explaining why)

15. Banking Reading
Read
Answer questions! :D