1. © South-Western Educational Publishing Chapter 18 Responsibilities and Costs of Credit  Using Credit Responsibly  Analyzing and Computing Credit Costs

2. GOALS © South-Western Educational Publishing Lesson 18.1 Using Credit Responsibly  Describe the responsibilities of consumer credit.  Discuss how to protect your credit card from fraud.  Explain how you can reduce or avoid credit costs.

3. © South-Western Educational Publishing Protecting Yourself from Credit Card Fraud Safeguarding Your Cards  Sign cards immediately.  Carry only cards you need.  Keep a list of cards and information about them.  Notify creditors when cards are lost or stolen.  Watch card during transactions.  Tear up any carbons.  Do not lend cards or leave them lying around.  Destroy expired cards.  Don’t give credit card information by phone to people or businesses you do not know.  Keep receipts and verify charges on statements.

4. © South-Western Educational Publishing Protecting Yourself from Credit Card Fraud Protecting Your Cards Online   

5. © South-Western Educational Publishing Avoiding Unnecessary Credit Costs        

6. GOALS © South-Western Educational Publishing Lesson 18.2 Analyzing and Computing Credit Costs  Explain why credit costs vary.  Compute and explain simple interest and APR.  Compare methods of computing finance charges on revolving credit.

7. © South-Western Educational Publishing Why Credit Costs Vary  Source of credit  Total amount financed  Length of time you are making payments  Ability to repay debt  Type of credit selected  Collateral (generally have a fixed interest rate)  Prime rate (interest rate that banks offer to their best business customers)  Economic conditions  Business’s cost of providing credit

8. © South-Western Educational Publishing Computing the Cost of Credit   

9. © South-Western Educational Publishing Simple Interest Formula I  P  R  T I=I= P=P= R=R= T=T=

10. © South-Western Educational Publishing Annual Percentage Rate Formula APR  2  n  f P (N  1) n= f= P= N=

11. © South-Western Educational Publishing Credit Card Billing Statements   