1. Credit Cards Independent Living

2. Why learn about credit/credit cards?!  9 out of 10 American families use credit  Mortgage, Medical, credit cards, etc.  An average American family has…  2.5 credit cards  $2,400 in charges  Pays $441+ per year in interest charges  1/6 families feel out of control with their credit cards and keeps on charging  1/10 families only make minimum payments and keeps on charging  1/20 families CAN’T even make minimum payments on all of their cards and yet they keep charging!

3. The granting of credit: The 3 C’s  In order to be approved for credit/borrow money the creditor will look at the following things:  Capacity: is you’re ability to repay what you charge  Collateral: is what they will take back if you don’t pay (doesn't’t apply for credit cards)  Character: is based on your credit bureau score, past experience with credit cards

4. Your credit bureau score:  What is it?  A score given to each person based on their credit character  Can be anywhere from 0- 850  How is it calculated?  Payment history  Amounts owed  Length of history  New credit  Types of credit

5. Your credit bureau score:  Why is it important?  Your score follows you everywhere and affects everything:  Ability to get a loan  Ability to get a credit card  Ability to rent/buy a home  Ability to buy a car

6. Key terms:  APR- annual percentage rate  variable/can change (important to know if you don’t pay off your credit cards)

7. Key terms:  Fees: late fee, over limit fee, etc.

8. What things can hurt score the most?  Maxed out credit cards  Bankruptcy  Missing a payment

9. What should you look for when shopping for a credit card?  Low APR  Does it offer rewards?  Do they charge fees?

10. Additional notes:  You can officially get a credit card on your own at age 18  But if you’re under 21 you need to prove income or have a co-signer  When to get a credit card?  If you’re 18, apply with a co-signer now, start building credit  Apply for a store card (Kohl’s, Target, etc.)