1. Objective: analyze the adv./disadv. and differences between credit, debit and prepaid cards Lesson 7.2 Pay Now: Debit Card Pay Later: Credit Cards Pay In Advance: Prepaid Cards

2. Debit- Pay Now Check card Funds drawn from your account immediately Spend only what you have Careful – overdraft fees and/or rejection at POS Advantages: Less cash to carry, most have zero liability if card is lost or stolen, NO APR (interest charged), no monthly payments, some offer reward programs Disadvantages: Fees for overdrafts, fees for using ATMS outside the network from both your bank and the bank that operates the ATM you are using.

3. Credit- Pay Later Promise to pay later with a line of credit Strict laws on issuing cards to anyone under the age of 21 (Credit Card Act 2009-10) May need cosigner Full amount paid each month – no interest If not, the Interest will build Advantages: Buy at POS, online, phone, mail order Helps to establish a credit history Complete transactions that are difficult with cash: airline tickets, rental cars, hotel reservations, collision damage waiver on rental cars. Zero liability protection if lost or stolen Cash Advances Rewards programs– Creditcards.com for details on various card offers

4. Continued: Disadvantages: – Impulse buying becomes easier – Interest that accumulates – Late payments, credit reports, poor scores if handled poorly – Rates can be extremely high – Kohls – 19.8 % -- 22.0% – Penneys – 18.5%

5. Pay in Advance Cards- Pre Paid Gift Cards –stores or online Visa Gift Cards- Fee to purchase, good anywhere visa is accepted Reloadable – online or by phone, use anywhere debit cards are accepted Adv: limit on spending, track your spending, less need to carry cash, most provide zero liability, No APR, No Debt Disadv: limited to certain stores, charge fees for purchase (visa),

6. Vocabulary- use the internet to define the following: Annual Fee- Available credit- Cash Advance transaction finance charge Cardholder agreement Credit Line Finance Charge Grace Period

7. Continued Introductory Rates- Late Payment fee- Minimum monthly payment- Overdraft-

8. Closure Activity Complete Module Three If time runs short, complete the rest of module three for homework.