1. Name ___________
Date____________
Credit and Debt-Personal Finance pg
Define any 3 black terms

2. Warm up What are 3 SPECIFIC THINGS YOU KNOW ABOUT CREDIT CARDS??
Do you know a story about someone who had credit card issues?
Write a few notes about what happened?

3. What is Credit?
Loans, credit cards, and other methods of deferred payments are known as credit. YOU PAY “INTEREST” ON CREDIT CARDS!! “INTEREST” KEEPS POOR PEOPLE POOR AND THE WEALTHY, WEALTHY!!!
CREDIT CARD DEBT WILL CATCH UP WITH YOU!!!

4. Who are Creditors? Are the people who lend you money.
Example: banks, credit unions, VISA, MasterCard, Discover, American Express, Car dealerships,
THE ONLY FINANCIALLY SMART LOAN
mortgage loans to buy a house and student loans (only for tuition and books)

5. The Four C’s Creditors look for capacity, capital, character,
collateral.

6. Capital: your regular income plus the money in your
savings and checking accounts.
Capacity: ability to pay the debt. Ask questions like how long
have you worked at you job? How much money do you make?
Character: willingness to repay the debt. Will obtain record
of payment history and past borrowing.
Collateral: Some loans require collateral, which
is property, used to secure a loan. If you fail to
pay loan creditor will take collateral. Examples: Car or House

7. Law Equal Credit Opportunity Act
Creditors cannot use age, gender, race, color,
marital status, religion, national origin to
discriminate against people applying for credit.

8. 4 Steps to Establishing Good Credit
1. Maintain savings and checking accounts.
2. Get 1 credit card or debit card
3. Use your bank deposit as collateral for a credit card
4. Have someone with good credit cosign your credit application

9. What are Finance Charges?
You will have to eventually pay back the money you borrowed PLUS fees and interest.
Creditors can apply fees for borrowing their money
Finance charges can be expensive and add up quickly!

10. ALWAYS AVOID!
Avoid making late payments, over borrowing and spending, protect your cards from loss or theft.

11. Types of Credit Loans: There are two types single and installment.
Single Loan payments: are short term and paid off in one lump sum
Installment loan payments: are repaid at a regular scheduled intervals or installments. Monthly

12. Credit Cards: Lets you borrow money on an
ongoing basis, up to a prearranged amount, to buy
any goods or services. Any amounts you pay
back you can reborrow.

13. Tips on choosing a Credit Card
Low APR rate
APR fixed or variable
See what the periodic rate is: interest rate applied to your account balance each billing period
See how finance charges are computed

14. Tips on choosing a Credit Card (continues)
WHAT IS THE INTEREST RATE 10%, 20%, 30%???
WHAT IS THE ANNUAL FEE??
Ask what OTHER fees the creditor charges

15. Finance Charges and Terms
Annual Percentage Rate (APR): Tells you what your credit will cost. It is the finance charge expressed as an annual rate.
Terms: length of your loan

16. Truth in Lending Law:
Protects the lender.
Creditors must disclose their finance charges,
fees, APR, monthly charges,
and the method of finance charge calculation.

17. Page 515 Credit and Debt Assignment
Page 512 define or explain 3-5concepts/ things you learned on page 512.
Page 513 define or explain 3-5 concepts/things you learned on page 513
Page 514 define or explain 3-5 concepts/things you learned on page 514
Page 515 define or explain 3-5 concepts/things you learned on page 515
OR YOU CAN WRITE A 3-5 SENTENCE PARAGRAPH FOR EACH PAGE!!!

18. Check your understanding pg. 515
2. Analyzing Information: Analyze the credit card offers your household receives in the mail or that you see advertised. Make a chart comparing their features and finance charges. Identify and explain which credit card is the best deal.