Ms. Smith

In some ways, that’s what a credit card allows you to do. But along with convenience come some obligations you should know about it.

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Customers apply for a credit card.
These cards allow the customer to “borrow” a certain $ amount from the organization by using the card to purchase items.
Any items these cards are used to buy are reported to the bank or store’s central accounting area, which sends customers a monthly bill.

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EVERYONE!
Currently, there are more than 1.14 billion credit cards in use in the U.S.
The average consumer has 3.5 cards.
76% of undergraduates have credit cards.
New Hampshire & New Jersey have the largest concentration of consumers with 10+ cards.

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The total U.S. credit card debt was 880.5 billion in
2014.
The average American household has an average of $15,191 in debt, excluding mortgages.
Undergraduates have an average debt of
$2,200.
Today’s consumer has a total of 13 credit obligations on record.

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Annual Percentage Rate (APR): determines the cost of your credit on a yearly basis.
Grace Period: amount of time you get to pay off debt without having to pay interest.
Finance Charge: total amount it costs you to finance the loan stated in dollars and cents.
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Annual Fees: yearly charges, usually ranging between $0 and $50.
Additional Fees:
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Balance Transfer
Cash Advance
Late fees
Over-the-limit fee

BankAmericard
Cash Rewards

Chase Rewards
Credit Card

Citi Diamond
Preferred Card

Citizens Bank
Cash Back Card

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Bank Cards: sponsored by individual banks and are considered all purpose cards since they can be used to pay for a variety of goods and services.
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Travel & Entertainment Cards: used by businesses and consumers for travel and entertainment expenses and have an annual fee.
Ex.) Disney, Target, BankAmericard Travel Rewards®
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Company or Retail Store Cards: used in the retail store or gas station and have no annual fee.
Ex.) Macy's, Best Buy, Exxon
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You must be at least 21 years old.
You must have an income or assets.
The amount must be realistic, based on your income and any credit you already have.
Credit record check.
Remember…carefully evaluate all the terms and conditions for each card you are considering.

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Capacity: your ability to pay; job check, how much you make, how long you’ve been employed.
Character: references to test to your reliability.
Credit History: information collected from the credit bureau.
Capital: includes cash, savings, and investments.
Collateral: consists of property or valuables, used as security for a loan.

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Anatomy of a Credit Card
How A Credit Card Transaction Works

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A credit card statement provides information such as:
When you’ve used your credit card
How much interest has accrued
How much your minimum payment is
How much credit you have left
Knowing how to read your credit card statement can help you to catch unauthorized charges or billing errors.

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A safe alternative to cash.
Builds a good credit history.
Bails you out of emergencies.
Gives you time to pay.
Offers protection for your cash.

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Way too tempting; impulse buying.
Interest!
Getting out of debt.
Buying things that wear out before you finish paying for it.

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Keep your cards with you or in a safe place.
Do not give your credit card number to friends.
Before signing receipts, verify for accuracy.
Keep all receipts to check against the billing statement.
Inform the credit card company immediately if you lose your credit card.
Become familiar with the consumer credit laws that protect you.

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In today’s world, credit is integrated into everyday life. You NEED credit in order to:
Acquire a mortgage to buy a home
Attain a loan to buy a car
Achieve the lowest interest rates for credit cards, mortgages & loans

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How you spend your $ says a lot about you!
Credit reporting companies track your payment history and supply this info. to lenders.

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A credit report is a collection of facts about you that tells lenders whether you’re a good risk to lend money to.
Your credit report contains 2 basic components:
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Info. about your credit history
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Every loan & credit card you’ve applied for or received
Credit limit
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How much you owe every month
Whether or not you make payments on time.
Other lenders that have asked to see your report
Your 3-digit FICO score (Fair Isaac Company)
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Tells lenders in a single # how good a credit risk you are.
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Scores between 300 and 850.

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Here’s what different scores say about you: o
>750 Excellent credit risk o o o o
720-750
660-720
620-660
<620
Very good credit risk
Acceptable credit risk
Uncertain credit risk
Risky
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3 companies publish credit reports:
Equifax
TransUnion
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Experian
*Be sure to check it for free once a year!!!
Tips to Live By...

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It may not sound like much...but it affects many areas of your life.
Loans
Interest rates
Credit cards
Happiness 

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Check your report regularly, reporting incorrect information.
Don’t hold or apply for too many credit cards.
Pay all your bills on time.
Don’t run up large balances you can’t repay.
Do apply for some credit!