1. Take Charge of Credit Cards==

2. Character:
The quality of ones reputation or name; financial or economic trustworthiness.
Capacity:
Ability to fulfill obligations evidenced by diligence at work and prospects of continuing employment or income.
Capital:
Assets in the form of cash and securities available to spend and invest.
Collateral:
Security for a loan in case the borrower cannot pay back the amount borrowed.
Conditions:
Describe the intended purpose of the loan.

3. 1.6.1.G1

4. 1.6.1.G1

5. What is Interest? Interest is the price of money
1.6.1.G1
What is Interest?
Interest is the price of money
When referring to credit, interest is the charge for borrowing money
The average balance
per open credit card
is $1,157
Interest can
cause stress

6. Credit Limit- maximum amount of money that can be charged on the card
What is a Credit Card?
Plastic card that holds pre-approved credit
Purchase items now
Pay later
Credit Limit- maximum amount of money that can be charged on the card

7. 34% of Americans reported paying only the minimum credit card payment

8. What do you think is the best payment option?
1.6.1.G1
Credit Card Payments
Make smaller payments- equal or unequal
Pay total amount owed OR
Minimum Payment- minimum amount of a credit card bill that must be paid every month
What do you think is the best payment option?

9. 1.6.1.G1

10. Why would someone choose a card with an APR of 10% instead of 15%?
Credit Card Interest
10%
APR
15%
APR
Why would someone choose a card with an APR of 10% instead of 15%?

11. Debit vs. Credit Card Credit Card Debit Card
1.6.1.G1
Debit vs. Credit Card
Credit Card
Debit Card
Connected to an account that holds cardholder’s money
Money is immediately taken out of an account
Not connected to an account
Money is borrowed and paid back later
Debit Card - plastic card that is electronically connected to an account that holds cardholder’s money

12. How do you get a credit card?1. 2.
Examine credit card offers
Complete an application

13. Show proof of sufficient income
1.6.1.G1
Getting a Credit Card
Must be 21
UNLESS
Show proof of sufficient income
Have a co-signer
If someone agrees to be a co-signer on an account, they are equally responsible for the loan

14. Grace Period
Provision in most loan contracts which allows payment to be received for a certain period of time after the actual due date with no extra fees.

15. Finance Charge
Another word for interest: A fee charged when the amount charged is not paid in full by the due date.

16. Advantages Disadvantages
Convenient
Useful for emergencies
Often required to hold a reservation
Purchase expensive items earlier
Possibility of receiving bonuses, such as frequent flyer miles and cash rebates
Paying interest if balance is kept on card
Additional fees may apply if card is not used properly
Tempting to overspend
Responsible for lost/stolen cards
Risk of identity theft

17. Do Don’t Pay amount charged in full every month Make late payments
Pay payments on time
Keep track of charges by keeping receipts
Check monthly credit card statement for errors
Make late payments
Pay only the minimum payment due
Go over the credit limit
Charge items that can’t be paid off within the month

18. Irresponsible use of Credit Cards
1.6.1.G1
Irresponsible use of Credit Cards
Late Payment Fee
Over-the-Limit Fee
Penalty APR
Charged when minimum payment is not made by due date
Charged if the amount of transactions goes over credit limit
Higher interest rate charged on new transactions

19. Why is it important to examine a credit card statement?
1.6.1.G1
Purpose
Includes
Summarizes important information from previous month
Transactions made
Amount owed
Minimum payment
Payment due date (date minimum payment is due)
Why is it important to examine a credit card statement?

20. Summary What is a credit card?
1.6.1.G1
Summary
What is a credit card?
How can you avoid paying interest on a credit card?
What is the difference between a credit card and a debit card?
Plastic card that holds pre-approved credit
Used for the purchase of items now and payment of them later
Pay the credit card balance in full every month!
Debit card- money is taken from the cardholder’s account
Credit card- money is borrowed and paid back later

21. Credit Reports and Scores

22. 3 Major Credit Bureaus
Credit reporting agencies collect and maintain the information that forms your credit history and ultimately, your credit report. That includes information about your existing credit accounts as well your payment history.

23. What’s on a Credit Report:
Credit Reports
Each person is legally given the right to a free annual credit report from AnnualCreditReport.com each year from each of the major credit bureaus (3 free reports per year)
What’s on a Credit Report:
Derogatory Remarks
Late Fees
Missed Payments
Collection Notices
Bounced Checks
Credit Score

24. Credit Score
A credit score is a three digit number calculated used by lenders to determine your worthiness for a mortgage, loan or credit card.
Your score can affect whether or not you are approved as well as what interest rate you are charged.