1. Credit Cards

2. shopping for a credit card  costs:  ■ Annual Percentage Rate (APR) or Finance (Interest) Charges  ■ Grace period  ■ Annual fees  ■ Transaction fees  ■ Balancing computation method for the finance charge  Some credit cards can have interest as high as 29.9%

3. Credit Card rates  Low- rate card10.5%  Major credit card19%  Department store card 29.9%  Very important website  http://canada.creditcards.com/ http://canada.creditcards.com/

4.  features:  ■ Credit limit  ■ How widely the card is accepted?  ■ What services and features are available?

5. calculating finance charges  cash advances:  You pay interest charges that accrue from the date of the cash advances.  adjusted balance:  You pay interest on the opening balance after subtracting the payments or returns during the month.

6.  Cash-like transactions  Transactions that are treated like cash advances. As with cash advances, there is no interest-free period, so interest is charged from the day the transaction is made.  Cash-like transactions include: wire transfers, money orders, travellers' cheques and gaming transactions such as buying lottery tickets, casino gaming chips, and betting.

7.  previous balance:  You pay interest on the opening balance, regardless of payments made during the month.  past-due balance:  No finance charge is added if the full payment is received within the grace period. If it is not received, a finance charge for the unpaid balance will apply.

8. credit card do’s and don’ts  ■ Look at various sources.  read and understand the contract  ■ Read the contract carefully.  ■ Don’t rush into signing anything.  ■ Once a contract is signed, get a copy of it.  ■ Know the penalties for missed payments.

9.  know your cost  ■ Figure out total price when paying with credit.  ■ Make the largest payments possible.  ■ Know the penalties for missed payments.  ■ Buy on installment credit only after you have evaluated all other possibilities.  ■ Don’t be misled into thinking small payments will be easy.

10. Line of credit  A line of credit is a type of loan that lets you borrow money up to a preset limit. You can use the funds as needed, up to a specified maximum and pay the loan back at any time. You are charged interest from the day you withdraw money, until you pay the loan back in full.

11. Don’t write this Home equity lines of credit Secured by your home — your home acts as collateral for the loan. Usually has a higher credit limit and lower interest rate than other types of loans or lines of credit. Financing major purchases, such as home renovations or a car. Personal lines of creditUnsecured. Interest rates are usually lower than for credit cards, personal loans or other short-term loans. Consolidating higher interest rate loans or unexpected expenses Student lines of creditUnsecured. Specifically for students. Similar interest rate to a personal line of credit. Often a parent or guardian will co-sign. Supplementing savings and income from part-time jobs to pay for basic expenses such as tuition, books, room and board, etc.

12. Tips  Read, Read, Read  Pay on time  Ask questions  Don’t co-sign

13. Shopping for credit cards  Handout  Use this website: http://canada.creditcards.com/ http://canada.creditcards.com/ 

14. The wise use of credit cards  Handout -  Use the following Website:  Use the following website:  http://www.practicalmoneyskills.ca/calcula tors/calculate/creditcost.php?calccategor y=debt http://www.practicalmoneyskills.ca/calcula tors/calculate/creditcost.php?calccategor y=debt

15. Credit card statement  Handout