1. Credit Vs. Debit cards

2. What are Credit Cards?
Pre-approved credit which can be used for the purchase of items now and payment of them later.
Discussion Topics:
Ask people to give their answers to What are Credit Cards? Before giving the “formal” definition.

3. Why Use a Credit Card? Establish good credit rating
United States and abroad
Emergency buying power
Extra identification
Often required to hold a reservation
(hotels, cars, etc.)
Discussion Topic:
What other reasons can the students come up with for having a credit card, or ask them for their ideas before presenting the ones on the slide.

4. Why Not Use a Credit Card?
Improper use can damage credit rating
Higher risk for impulsive buying and overspending
Debt trap when used unwisely
High interest rates
Paying off purchases from past
Possible hidden fees & surcharges
Privacy is an increasing concern
Identity theft easier
Discussion Topic:
What other reasons can the students come up with for not having a credit card, or ask them for their ideas before presenting the ones on the slide.

5. A Schumer Box you May Expect To See
Annual Percentage Rate for purchases and balance transfers*
2.99% APR (.00819% daily periodic rate) on purchases and balance transfers until the first day of the billing cycle that includes the six (6) month anniversary date of the opening of your account. In the absence of the introductory rate, 12.99% APR(.03559% daily periodic rate) on purchases and balance transfers.**
Grace period for repayment of the balance for purchases
You will have a minimum of 25 days without a finance charge on new purchases if the total New Balance is paid in full each month by the statement closing date.
Method of computing the balance used in calculating finance charges for purchases
Average daily balance (including new purchases)
Annual fee
$25
Minimum finance charge
For each Billing Period that your Account is subject to a finance charge, a minimum total Finance Charge of $0.50 will be imposed.
Miscellaneous fees
Cash advance fee: 2.5% of amount of the cash advance, but not less than $2.50. Late payment fee: $25 Over-the-credit-limit fee: $25 Returned check fee: $25
Schumer box source:

6. A Schumer Box and Credit Card Terms Explained
Annual Percentage Rate for Purchases
Grace Period for Purchases
Minimum Finance Charges
Balance Calculation Method for Purchases
Annual Fees
Transaction Fees for Cash Advances
Late Payment Fees
19.9%
Not less than
25 days
$.50 when a finance charge at a periodic rate is charged
Average daily balance method (including new purchases)
$20 per year
2% with a minimum fee of $3
$29
Annual Percentage Rate (APR): interest rate charged for amount borrowed in terms of percentage per year
Grace Period: amount of time allowed before finance charges (interest or cost of credit) are applied

7. Using a Credit Card Properly
Only use when you know for sure you can pay it off
Record all expenses and keep receipts
Check statement for errors
Pay off completely and timely

8. Safety Tips Sign card with signature and “Please See ID”
Do not leave cards lying around
Close unused accounts in writing and by phone, then cut up the card
Do not give out account number unless making purchases
Keep a list of all cards, account numbers, and phone numbers separate from cards
Report lost or stolen cards promptly

9. Are Debit Cards a type of Credit Card?
NO!
Debit Cards are:
Not the same as credit cards
Not a form of credit at all
Directly linked to your bank account.
Debit=Credit
Debit cards allow payment and purchase
to happen simultaneously

10. Debit card is cash in the form of a plastic card.
What are debit Cards?
Debit card is cash in the form of a plastic card.
Discussion Topics:
Ask people to give their answers to What are Credit Cards? Before giving the “formal” definition.

11. Why Use a debit Card? Use instead of cash or check
Used to pay car payments, rent etc.
Taken from checking account
PIN-system security
No annual fee
Discussion Topic:
What other reasons can the students come up with for having a credit card, or ask them for their ideas before presenting the ones on the slide.

12. This highly competitive market has resulted in impressive card growth
Debit Cards
Cheques
Cash
High take up of cards
Credit Cards
Cash is the largest volume
129%
-11%
+11%
+20%