1. Consumer Action: Use Credit Wisely Consumer Action created this project in partnership with USE CREDIT WISELY

2. Consumer Action: Use Credit Wisely Advantages of Credit  What can credit do for you?  Help you through a financial emergency  Enable you to pay for a purchase over time  Provide a short, interest-free loan  Enable you to rent a car, hotel room, etc.  Offer convenience, security when shopping  Rebates or rewards  Allow you to avoid carrying cash  Allow you establish credit/build good credit

3. Consumer Action: Use Credit Wisely Types of Credit Installment Credit  Fixed number of monthly payments  Car loans, mortgages Revolving Credit  Short-term, open-ended  Assigned credit limit  Available credit fluctuates as you make purchases & payments  Option to make full or partial payment  HELOCs, credit cards

4. Consumer Action: Use Credit Wisely Card Types Credit, charge & debit cards  Visa, MasterCard, Discover  Affinity cards  Rewards cards  Secured cards  Retail and gas cards  Stored value (prepaid) cards  Charge cards  Debit cards

5. Consumer Action: Use Credit Wisely Credit Card Terms  Credit limit  Method of computing the balance  Minimum payment  Payment due date  Grace period  Interest rate  Fees

6. Consumer Action: Use Credit Wisely Credit Card Terms: Interest  The lender’s fee for allowing you to use its money  Expressed as a percentage of the credit  Fixed vs variable interest rate  Annual percentage rate (APR)  Periodic interest rate  Different rates for a single card:  Teaser  Cash advance  Purchase  Penalty/Default  Balance transfer  Effective interest

7. Consumer Action: Use Credit Wisely Credit Card Fees  Application fee  Annual fee  Balance transfer fee  Cash advance fee  Currency conversion fee  Late fee  Overlimit fee  Bounced check/returned item fee  Miscellaneous fees

8. Consumer Action: Use Credit Wisely Activity: Credit Card Jeopardy  Break into three groups  Choose one person on your team to “buzz” in when you think you have the correct “question” to the answer  A correct answer earns the point. An incorrect answer loses a point and allows another team to “steal” the point.  Remember to phrase your answer in the form of a question.

9. Consumer Action: Use Credit Wisely Credit Card Billing Statements  Opening/closing date  Past due amount  New balance  Minimum payment due  Due date  Account summary  Transactions  Rewards information  Explanation of finance charges  Effective APR

10. Consumer Action: Use Credit Wisely Food for Thought  In 2007, credit card customers who revolved their debt (didn’t pay the balance in full each month) paid $18.1 billion in penalty fees to credit card companies. Source: “Don’t Get Clobbered By Credit Cards,” by Gary Weiss

11. Consumer Action: Use Credit Wisely Comparing Credit Cards  Credit limit  Purchase APR  Balance transfer APR  Cash advance APR  Promotional APRs  Penalty APR  Variable-rate info  Grace period  Annual fee  Transaction fees  Penalty fees  Balance computation method  Minimum finance charge  Rewards

12. Consumer Action: Use Credit Wisely Activity: Credit Card Match-Up  Break into groups  Answer the questions for each scenario based on what you have learned so far  There may be more than one “right” answer to each question  Choose a spokesperson to explain your choices

13. Consumer Action: Use Credit Wisely Obtaining Credit  Pre-approved offers  Invitations to apply  Instant credit  Consumer-initiated application  Banks, credit unions, retailers, card companies, and other institutions  Compare offerings, terms  www.consumer-action.org  www.bankrate.com  www.cardtrak.com  www.cardratings.com

14. Consumer Action: Use Credit Wisely Using Credit Wisely  Know your credit limit and don’t exceed it  Charge only as much as you can repay  Pay more than the minimum, if possible  Pay by your due date (and time!)  Use a debit card, not a credit card, to get cash  Don’t accumulate too much debt  Avoid penalty fees and rates  Consider optional fee-based services carefully  Contact a credit counselor (www.nfcc.org or www.aiccca.org)

15. Consumer Action: Use Credit Wisely Congratulations! You’ve completed the ‘Use Credit Wisely’ training!