1. Average Credit Card Debt Average Minimum Payment
$15,000
Average Interest Rates
15-30%
Average Minimum Payment
3-5% of balance

2. -$ 450 - - Minimum Payment (3%) $14,550 +$243 - - Interest (20%)
$15,000
-$ Minimum Payment (3%)
$14,550
+$ Interest (20%)
$14,793
-$ Minimum Payment (3%)
$14,349
+$ Interest (20%)
$14,588
-$ Minimum Payment (3%)
$14,150
+$ Interest 20%
Paid: $1,332.00
Amt. decreased: $614.00
$14,386

3. **If we continue to pay only the minimum payment, it will
take 333 months (28 years) to pay off this card. We will
have paid $18, in interest alone. Remember, the
balance of what we owed was only $15,000.

4. A Snapshot of the “Normal” American Family
**Don’t be fooled by outside images of new cars and expensive homes.
Many Americans are struggling financially and drowning in debt.
Average Credit Card Debt $15,799
Average Mortgage Debt $149,667
Average Student Loan Debt- - $32,559
Average Car Loan Debt $13,125
**This does not have to be your future. If you manage money well
from the start and make the decision not to use debt as a financial
tool, you can avoid the stress of living paycheck to paycheck.

5. *Our economy depends on people buying on credit.
*Whenever you buy on credit, you
are going into debt!
*Getting a loan or using a credit card
Is the same thing - - Interest!

6. Installment Debt -equal payments over time. -durable goods
2 Types of Debt
Installment Debt -equal payments over time.
-durable goods
**Length of time for your loan (maturity) will
affect payment price and the amount of
interest you pay.

7. Mortgage
-debt on real estate
-largest form of debt
-buy house, building, land
-take out loan on value of home

8. Why buy on credit?
-use it while you pay
for it
-emergencies
**Some people do not believe in using
credit for anything other than a home.
if they want something, they save for
it.

9. **Borrowing is a question
of whether the satisfaction is
worth the interest.

10. Home Equity Loans
Property values tend to rise. You can usually sell property for more than you paid for it.
Equity- -the difference in the value of a property and what you
owe on the property (liabilities)
Example: Buy House $40,000
Pay ,000
Owe ,000
Value increases $75,000
Owed ,000
Take out loan $45,000

11. **If you have a 15 year mortgage, you can pay it off in 11 years just
can pay it off in 21 years just by
making one extra payment per year!
**If you have a 15 year mortgage,
you can pay it off in 11 years just
by making one extra payment a
year!

12. A(n) _____ loan is a loan that is repaid in a series of fixed, scheduled payments rather than in a lump sum.
a. interim
b. single-payment
c. installment
d. mortgage
e. consolidated
With a bank credit card, one can often avoid interest charges if:
a. the account balance is paid in full every month.
b. at least half the account balance is paid every month.
c. the minimum payment is made every month.
d. the account is a revolving credit account.
e. the account balance is below the credit limit.

13. When comparing two installment loans with the same principal and annual percentage rate (APR), the loan with ____________.
a. the longer maturity will have the lower monthly payment and the higher total
costs
b. the shorter maturity will have the lower monthly payment and the higher total
c. the longer maturity will have the higher monthly payment and the higher total
d. the shorter maturity will have the lower monthly payment and the lower total