CREDIT COUNSELING CREDIT CARDS GOOD VS. EVIL ARE ‘COLLEGE KIDS’ READY FOR CREDIT CARDS?COLLEGE...
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Transcript of CREDIT COUNSELING CREDIT CARDS GOOD VS. EVIL ARE ‘COLLEGE KIDS’ READY FOR CREDIT CARDS?COLLEGE...
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CREDITCOUNSELING
www.creditcards.com
CREDIT CARDSGOOD VS. EVIL
ARE ‘COLLEGE KIDS’ READY FOR CREDIT CARDS?
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CREDITCOUNSELING www.creditcards.com
CREDIT CARD TYPES
RESEARCH Reward Cards
› Are for people who like to earn rewards for travel, dining, cash back etc.
Bank Cards › Are sponsored by individual banks.
› MasterCard, Visa, Discover, Optima, GM and Ford cards which are
› Bank defines spending limit › Based on your FICO score
› Banks offer a choice of payment methods› pay the balance in full with no interest
› pay a minimum part or some part of the balance with a finance charge.
Company or Retail store cards › Costco, Carson's, Wal-Mart or Target.
› Only accepted by the specific company and do not have an annual fee
› Terms/conditions of these cards vary widely
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CREDITCOUNSELING www.creditcards.com
CREDIT CARDS 101
TERMS TO KNOW…….
When selecting a credit card, the following credit terms and conditions are important because they affect the total cost of credit:
Annual Fee › A flat, yearly charge similar to a membership fee,
usually $25 to $50. Annual Percentage Rate
› The APR is the measure of the cost of credit expressed as a yearly rate.
Finance Charge › The dollar amount you pay to use credit, includes
interest costs and all charges associated with the transaction.
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CREDITCOUNSELING help is herewww.creditcards.com
CREDIT CARD TERMS 101 CONTINUED
Grace Period or Free Period › The grace period is the number of days you have
before a credit card company starts charging interest on new purchases. Not all credit cards have a grace period.
Periodic Rate › The interest rate the card issuer applies to your
outstanding account balance to figure the finance charge for each billing cycle.
Transaction Fees › Some credit card issuers charge additional fees: for a
cash advance, a late payment or going over your credit limit. Sometimes there is a monthly fee if you did not use the card.
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CREDITCOUNSELING www.creditcards.com
SHOP AROUND….
YOU ARE AN AMERICAN FAMILY DETERMINED TO PAY OFF YOUR $8000 CREDIT CARD DEBT.
Interest Rate
MinimumPayment
Fixed payment
Number of Months to pay off
Total interest paid on debt
of $8000
12% $200 0
$250
$500
19% $200 0
$250
$500
28% $200 0 Minimum payment is not enough to reduce your debt
$250
$500
How long will it take?
How much
interest will you
pay?
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CREDITCOUNSELING www.creditcards.com
WHAT IS YOUR
LIABILITYTRUTH IN LENDING ACT
Under the Truth in Lending Act› If your credit card is lost or stolen – and then is
used by someone without your permission How much do you have to pay for their charges?
$50.00
› You do not need to buy “credit card insurance” to cover amounts over $50
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CREDITCOUNSELING help is herewww.creditcards.com
FEDERAL CREDIT BILLING ACT
Purpose of Act
To make quick corrections of mistakes such as…› A charge for something you did not buy› A bill for an amt different from the actual amt you
charged› A charge for something that you did not accept when
it was delivered or that was not delivered according to an agreement
› Math errors or payments not credited to your account
› A charge by someone who does not have permission to use your credit card
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CREDITCOUNSELING www.creditcards.com
FEDERAL CREDIT BILLING
ACT WHAT TO DO
• Contact the credit card company within 60 days after the statement date
• Pay all other parts of the bill. You do not have to pay the disputed amount or finance charges associated with it.
• If there is an error, you do not have to pay anything
• If there is not an error, company must send you an explanation and statement of the amount your owe. The amount you owe will include finance charges
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CREDITCOUNSELING help is herewww.creditcards.com
CREDIT REPORTS 1. Equifax
2. Trans union
3. Experian
What’s a credit score?
Who’s FICO?
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CREDITCOUNSELING www.creditcards.com
CREDIT CARDS
Are ‘College Kids’ ready for credit cards?
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CREDITCOUNSELING
www.creditcards.com
CREDIT CARDSUSE THEM WISELY!!
KNOW THE DEBT WARNING SIGNS