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The majority of Canadian have at least one, and possibly multiple credit cards.
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Transcript of The majority of Canadian have at least one, and possibly multiple credit cards.
HOW CREDIT CARDS WORK
INTRODUCTION The majority of Canadian have at least
one, and possibly multiple credit cards.
INTRODUCTION Credit cards originated in the USA in the
1920s. Individual companies offered them to
people making purchases from those businesses.
Their use increased dramatically after WWII.
First universal credit card established in 1950.
BENEFITS OF CREDIT CARDS Major source of identification. Convenient
CREDIT CARD SAFETY Sign your card – as soon as your receive
it. Enter your PIN in such a way that no one
can easily memorize it. Don’t leave your receipts behind
personal information on them may be taken.
Always shred credit card statements before recycling.
CREDIT CARD SAFETY Avoid giving your credit card number
over the phone. Ensure you get your card back after you
make a purchase. Write “See ID” on the back of your card.
This will trigger the merchant to ask for your ID.
CREDIT CARD APPLICATIONS Annual Fee – a flat, yearly charge
Many companies offer “no annual fee” cards.
Some cards with fees will also come with benefits.
Grace Period – a time period, usually about 25 days, in which you can pay off your balance with out interest.
CREDIT CARD APPLICATION Annual Percentage Rate (APR) – the
yearly rate of the finance charge.Fixed Rate – does not changeVariable Rate – prime rate (which varies)
plus added percentage. Introductory Rate – a temporary, lower APR
that usually lasts for about six months before converting to the normal fixed or variable rate.
MONTHLY PAYMENTS Visa and MasterCard offer revolving
credit.They allow you to carry a balance, on which
they charge interest.They require you to make a minimum
payment.The minimum payment is usually 5% of
your current balance.
MONTHLY PAYMENTS High-rate card – 23.99%
You spend $1000. You make only the minimum payments,
starting at $51.You will make 77 payments, and will have
paid $573.59 Low-rate card – 9.9%
You spend $1000. You make only the minimum payments,
starting at $50.41You will make 17 fewer payments, and will
have paid only $176 in interest.
QUALIFYING FOR CREDIT Good Payment Record
Pay bills on timeLate payments can hurt your chances, or
raise your interest rate.