1. Managing Credit cards Checking Accounts & other Banking Transactions

2. Credit Cards The bank allows you to use money now and pay it back, plus extra money later. You can get the money by using a credit card. The bank will send you a bill at the end of the month

3. Let’s talk about tips for using credit cards correctly!

4. Tip #1 When you get your first credit card, start with a very low limit. Recommendation- $300 Gives you an opportunity to test the waters. You can always increase limit later after you show responsibility.

5. Tip #2 Try to obtain a ‘major’ credit card, such as MasterCard or Visa. If you get turned down, go with gas cards or major department stores. Try to avoid the smaller retail stores.

6. Tip #3 When offered a discount for opening a card with a smaller retail store, smile and say “No thank you.”

7. Tip #4 Find a bank that doesn’t charge an annual fee on the credit card.

8. Tip #5 Very important!- Find out what interest rate they are charging you! Sometimes they offer an introductory rate for a few months, and then shock you with a higher rate later.

9. Tip #6 There are no interest charges when you pay your card off every month You are able to borrow the money for a few weeks with no cost to you.

10. Tip #7 The best way to build a credit history is to use your credit card and pay in full every single month. It shows the credit bureaus your ‘ability to repay’. We’ll discuss credit history and credit bureaus in a moment.

11. Tip #8 Never spend more than your credit limit. The bank may increase your interest rate and you may not be able to get it down again. You may also be subject to additional finance charges or late fees. This is wasted money!! You work too hard for your money, please don’t give it to them!

12. Action Items! Write down 3 of the most important things you should do with credit cards. Then, share it with your parents.

13. Section 2 http://www.youtube.com/watch?v=WbPQv_ 4Pm2w Moesha – Credit Card

14. What’s the big deal about credit?

15. You need to use credit to build credit history. What exactly is credit history? A credit history is a ‘reporting’ of your credit usage. It shows how well you can manage your money.

16. As you use and pay on your credit cards, you are being ‘graded’. If you use and pay wisely, you will get a good grade. Your grade is your FICO score.

17. There are 3 credit bureaus- Experian, TransUnion and Equifax They will score you, based on various factors.

18. You are also scored on car payments, mortgages, school loans and other debt. Any debt you have, will show on your credit report. Except those of personal nature...money borrowed from family or friends.

19. Here’s a breakdown of general scoring and grading: 740+ A 700-740 B 680-700 C 620-680 D 620 or below F

20. These aren’t grades written in stone, just guidelines for you to strive for. Interest rates on cars, mortgages or other debt will be better if your scores are high. This is why it is so important to have good credit scores! You can save potentially thousands of dollars, or more, over time just by having good credit scores.

21. Did you know that some employers will pull credit before they hire you? They want to see how responsible you are! Some insurance companies will pull credit too!

22. Don’t put anything on credit that you can’t pay for in full when the bill arrives.

23. You can pull credit once a year for free at www.annualcreditreport.com This report will give you details of your credit, but not FICO score. Go to www.myfico.com for scores...they will charge you nominal fee. www.myfico.com

24. Section 3

25. Time for the checking account!

26. Checking Accounts

27. Why do people write checks?

28. Checking Accounts Money in a checking account is used is used for everyday expenses. There is not a minimum balance that you have to keep in a checking account

29. How to Make a Deposit Deposit slip A Deposit means you are You are putting money in the bank

30. Parts of the Deposit Slip 1. ______________________________________________________________ 2. ______________________________________________________________ 3. ______________________________________________________________ 4. ______________________________________________________________ 5. ______________________________________________________________ 6. ______________________________________________________________ 7. _________________________________________________ _____________

31. Parts of the Deposit Slip 1. Date 2. Cash being deposited 3. Checks being deposited (list individually) 4. Total from everything listed above (Sub-total) 5. Less cash received (What you want back) 6. Net deposit 7. Signature line (if receiving cash back) 1 2 3 4 5 6 7

32. PRACTICE TODAYS DATE DEPOSIT $50.00 IN CASH DEPOSIT 3 CHECKS, FOR $380, $120, AND $75 TOTAL DEPOSIT $625

33. Practice filling out a deposit ticket Complete 2 more deposit slips for the following: $16.25 in cash, a check from your mother for $100.00 and check from your job for 225.00 A check $537.00, and you want to get $100.00 back in cash

35. There are 6 parts a check D____________________________________________________ A____________________________________________________ M____________________________________________________ P____________________________________________________ E____________________________________________________ R _______________________________________________

36. There are 6 parts a check DDateThe date the check is issued A AmountThe amount of money paid to the payee MMakerThe person responsible for paying the amount written PPayeeThe person getting the money EEndorsementThe signature of the person cashing the check RRouting Number Identifies the bank the check belongs to D A M P E R

37. Checks come in many styles & colors, and some banks require you to buy them since they are personalized

38. If you do not write your check out correctly the bank will NOT pay the money.

39. Checks can not be written for more money than you have in your checking account. The bank will charge you a fee and make you pay the money back!

40. Sample Checks

41. Practice filling out checks 1.Pay to the order of Sneaker World for $87 for a new pair of sneakers. 1.Pay to the order of your school for $100 or 2 Prom Tickets.

42. Section 4

43. Using a Check Register

44. Things can become unorganized if you do not keep track of your money and your checks! When you open a checking account, you receive a check register. This is a place where you record every check you write, every ATM withdrawal you make, every debit card purchase, and every deposit that you make. Careful math is important!!!

46. How much money do you have left in your checking account? What will happen if you overdraw your account?

47. You have the option of ‘banking online’ and paying your bills via the bank’s website. You still need to document your spending in your checkbook register and keep a running balance. Many people do both online banking and personal check writing. Just be certain to document all spending in one place (checkbook register.)

48. Balancing your checkbook!

49. This is actually very simple, yet imperative. By balancing your checkbook, you are making sure all activities on your account are correct. Sometimes banks will make errors or charge you for something you weren’t aware of.

50. This will also double check your math, as you add or subtract your deposits and withdrawals. You are basically comparing your checkbook register against your monthly bank statement. You will track any service charges (which hopefully you won’t have) and interest credited. Some of the most common mistakes are in the arithmetic, so if it helps, use a printing calculator.

51. If you use a debit card that is tied to this same account, be sure to write down what you did! If you took out $20 cash from the ATM, write it in your checkbook register. It’s no different than writing a $20 check to yourself.

52. Some banks will charge a monthly service fee, phone bank fee, ATM fees or overdraft fee. Please be sure to check for these every month! You may not realize you incurred a fee and then overdraft (spend money that you didn’t have in your account). Overdraft fees can be very expensive!

53. Many banks have special accounts for teens that waive the monthly service fee. If you use an ATM, be sure it’s linked with your particular bank. Otherwise you will incur ATM fees. Banks make mistakes too! Be sure to check your monthly statement carefully for charges that many be incorrect. If you find an error, contact bank immediately and have them reverse fee.

54. Step by step~ Balancing your checkbook

55. * On your bank statement do the following: Start with: ending balance from statement: $______ Add: Deposits not on statement: $______ Subtotal = $______ Subtract: Checks outstanding (did not clear) $______ BALANCE: (this should agree with checkbook) $______

56. * From your checkbook register: Start with: balance from checkbook $______ Add: interest earned or other credit shown on statement, but not in check book. $______ Subtotal = $______ Subtract: Service charges or other debits shown on statement, but not in checkbook. $______ BALANCE: (this should agree with statement) $______

57. Do this every month to minimize overdraft fees and to stay on top of your finances! Don’t be shy about contacting bank if you’ve been charged incorrectly!

58. If you don’t have a checking account yet, check with your parents and see if they will allow you to practice with their account. They may even pay you for this ‘work’ ! Which brings us to our next topic~ entrepreneurship!