1. Personal Finance Managing Credit
Bill Klinger

2. Personal Finance Review Types of credit Credit Bureaus Identity theft
Non-installment
Installment
Revolving open-end credit
Credit Bureaus
FICO score
Improving credit score
Identity theft
How stolen
How to protect

3. Credit Cards Advantages Disadvantages
Do not need to carry cash or checks
Free financing, if pay off
Track expenses
Builds credit
Disadvantages
Buy things cannot afford
Buy more than you should
Build up debt

4. Credit Cards Application information Credit check Birth date SSN
Monthly/annual income
Debts
Credit check
Look for risks

5. Credit Cards Providers Credit limit Overdraft protection Annual fee
Visa, Master Card, Discover, American Express
Retailers
E.g. Best Buy, Macy’s, Exxon/Mobil
Credit limit
Overdraft protection
High fees
Don’t spend to the max
Annual fee
Avoid unless get real value
E.g. free checked bags

6. Credit Cards Grace period Interest rate About 20 days after statement
Pay it off promptly!
Interest rate
15-20%
Don’t bother with different ways of computing interest
Can not get ahead financially if owe credit cards
Pay it off!

7. Managing Credit Cards Do not carry more credit cards than necessary
Do not buy if can’t pay it off
Do not use the maximum credit limit
If have a balance
Pay it off before paying off other debt
Must make required payments on all debt
Pay it off before investing
You aren’t going to make 20% a year investing
Can contest charges
Call credit card company
Tell them the nature of your challenge

8. In Class Do TV purchase example In groups of two
Financial Planning Problems at the end of Chapter 8
1 – 7, 9