Understanding a Credit Card
“Take Charge of Your Finances”
Advanced Level
1.4.1.G1
What is Credit?
Credit- when goods,
services or money is
received in exchange for a
promise to pay a definite
sum of money at a future
date
Credit is derived from
the Latin word “credo”
meaning “I believe”
Why would a person want to use credit?
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 2
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Obtaining Credit
Borrower is in need
of credit
Borrower- person or
organization that is
receiving the money
Lender determines
Borrower requests to whether to grant the
receive credit from a borrower credit based
on perceived
lender
creditworthiness
Lender- person or
organization who has the
resources to provide the
borrower money
Creditworthiness- an
individual’s ability and
willingness to pay the
money back
Why would a lender assess a borrower’s
creditworthiness before granting credit?
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 3
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Paying Back Credit
If approved, the
borrower will
receive money
from the lender
Borrower is
usually expected
to pay interest in
addition to the
money borrowed
Borrower pays
money back
Interest - the
price of money
Why would a lender charge a borrower
interest?
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 4
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Different Forms of Credit
How are these forms of credit different?
VS.
Closed-end Credit
Open-end Credit
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 5
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Closed-end vs.
Open-end Credit
Definition
Purpose of
loan (what is
purchased)
1.4.1.G1
Closed-end credit
Open-end
(revolving) credit
A one-time loan
Credit extended
in advance
Specified in
application
May be used for a
variety of
purposes
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 6
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Closed-end vs.
Open-end Credit
1.4.1.G1
Closed-end credit
Open-end credit
Payments
Specified number
of equal payments
Varies- can be paid in
one payment or a series
of equal or unequal
payments
Loan
Amount
Agreed upon during
the application process
May be increased
Examples
Mortgage,
automobile,
education loans
Credit cards
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 7
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
What is a Credit Card?
Buy Now, Pay Later
Pre-approved credit which can be used for the purchase
of goods and services now and payment of them later
May continue to borrow as long as the credit limit
(maximum dollar amount loaned) is not exceeded
Credit limit varies based upon the cardholder’s
perceived creditworthiness
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 8
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit Card
Interest
Interest is charged each month the
balance is not paid in full
Rate at which interest is
charged is referred to as:
Annual Percentage
Rate (APR)
The cost of credit expressed as
a yearly interest rate
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 9
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Minimum Payments
• Required to make at least a minimum
payment each month
– Usually only a small percentage (2.5-5%) of the
total balance due
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 10
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Minimum Payments
To prepare for her first semester of college, Miranda purchased a
new computer for $1000 and textbooks for $500, spending a total
of $1500 on her credit card charging 15% APR. How much would
Miranda pay in interest if she makes the minimum payment?
Payment
Made
Full Payment
Partial
Payment
Minimum
Payment
~ Total
~ Time to pay
~ Total
amount of
off card
amount paid
interest paid
$1500
1 month
$0
$1500
$135
1 year
$125
$1625
$30
11 years
$1413
$2913
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 11
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Advantages & Disadvantages
to Using Credit Cards
• Convenient payment tool
• Useful for emergencies
• Often required to hold a
reservation
• Able to purchase “big ticket”
items and spread out payments
• Protection against fraud
• Opportunity to establish a
positive credit history
• Online shopping is safer than
using a debit card
• Possibility of receiving bonuses
• Interest can be costly when a
balance is revolved
• Additional penalty fees may
apply
• Tempting to overspend
• Risk of identity theft
• Responsible for lost/stolen
cards
• Applying for multiple accounts
in a short period of time can
lower your credit score
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 12
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
What is a Debit Card?
• Plastic card which looks like a credit card but is
electronically connected to the cardholder’s
bank account
• Money is immediately withdrawn from the
cardholders checking account
What is the difference between a
credit card and a debit card?
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 13
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Creditworthiness
Credit card approval
depends on
borrower’s perceived
creditworthiness
How a person uses a
credit card affects
their
creditworthiness
Creditworthiness is determined by a
credit report and/or credit score
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 14
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit History
Credit Report
A record of a consumer’s credit history that includes information
about credit card use as well as the use of other types of credit
Credit Score
A number that summarizes an individual’s credit record and history; a
numeric “grade” of a consumer’s financial reliability
Credit cards can have a positive or negative
impact on an individual’s credit history
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 15
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Positive Credit
Card Use
Proper credit
card use
Helps develop
positive credit
history and
credit report
1.4.1.G1
Earn a high
credit score
A high credit score gives the opportunity to have lower interest
rates on loans, the privilege to use different forms of credit,
and an easier approval process for future credit
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 16
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Positive Credit
Card Use
• Examples of positive credit card behaviors:
– Paying credit card balances in full every month
– Paying credit card bills on time
– Applying for only credit cards that are needed
– Keeping track of all charges by keeping receipts
and using a check register
– Checking the monthly credit card statement for
errors
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 17
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Negative Credit
Card Use
Improper
credit card
use
Develops
negative
credit history
and credit
report
1.4.1.G1
Lower credit
score
Consumers with low credit scores have difficulty getting
loans, difficulty renting apartments, pay higher interest
rates, pay higher insurance rates, and have difficulty
obtaining a job
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 18
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Negative Credit
Card Use
• Examples of negative credit card behaviors:
– Making late credit card payments
– Paying only the minimum payment
– Exceeding the card’s credit limit (usually triggers a
penalty fee)
– Charging items that can’t be paid off immediately
– Owning too many credit cards
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 19
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
NO Credit
• If an individual has not used credit, they will
not have any information in their credit report
• Not having a credit report can cause an
individual to be denied credit
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 20
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit Card Offers
Credit card issuers are required to disclose the terms
and fees of credit cards in an easy to read box format
Called the Schumer Box
Must direct to the Federal Reserve website
(http://www.federalreserve.gov/creditcard/) to obtain more
information about credit cards
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 21
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Interest Rates and Interest Charges
Annual Percentage
Rate (APR) for
Purchases
Credit cards may charge
many different types of
interest rates
Annual Percentage Rate (APR)
for Purchases
• Interest rate paid for
purchases
• Multiple interest rates may be
listed - final interest rate may
depend on creditworthiness
of applicant
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your
creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the
market based on the Prime Rate.
APR for Balance
15.99%
Transfers

This APR will vary with the market based on the Prime Rate
APR for Cash
21.99%
Advances

This APR will vary with the market based on the Prime Rate
Penalty APR and
28.99%
When it Applies
This APR may be applied to your account if you:
1.
Make a late payment;
2.
Go over your credit limit;
3.
Make a payment that is returned; or
4.
Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APR’s are increased for any of these
reasons, the Penalty APR will apply until you make six consecutive minimum payments
when due.
How to Avoid Paying Your due date is at least 25 days after the close of each billing cycle. We will not charge
Interest on Purchases you any interest on purchases if you pay your entire balance by the due date each
month.
Minimum Interest
If you are charged interest, the charge will be no less than $1.50.
Charge
For Credit Card Tips
To learn more about factors to consider when applying for or using a credit card, visit
from the Federal
the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
Reserve Board
Fees
Set-up and
Maintenance Fees
NOTICE: Some of these set-up and maintenance fees will be assessed before you begin
using your card and will reduce the amount of credit you initially have available. For
example, if you are assigned the minimum credit limit of $250, initial available credit will
be only about $209.

Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)

Additional Card Fee: $5 annually (if applicable)
Transaction Fees

Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is
greater (maximum fee: $100)

Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever
is greater

Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees

Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is
more than $1000

Over-the-limit: $29

Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called “average daily balance (including new
purchases).”
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more
than 60 days late in paying your bill
Fixed vs. Variable-rate APR
• Fixed-rate APR- cannot
change during the period of
time outlined in a credit
card agreement
• Variable-rate APR- may
change depending on other
factors (such as economic
conditions)
Interest Rates and Interest Charges
Annual Percentage
Rate (APR) for
Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your
creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the
market based on the Prime Rate.
APR for Balance
15.99%
Transfers

This APR will vary with the market based on the Prime Rate
APR for Cash
21.99%
Advances

This APR will vary with the market based on the Prime Rate
Penalty APR and
28.99%
When it Applies
This APR may be applied to your account if you:
1.
Make a late payment;
2.
Go over your credit limit;
3.
Make a payment that is returned; or
4.
Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APR’s are increased for any of these
reasons, the Penalty APR will apply until you make six consecutive minimum payments
when due.
How to Avoid Paying Your due date is at least 25 days after the close of each billing cycle. We will not charge
Interest on Purchases you any interest on purchases if you pay your entire balance by the due date each
month.
Minimum Interest
If you are charged interest, the charge will be no less than $1.50.
Charge
For Credit Card Tips
To learn more about factors to consider when applying for or using a credit card, visit
from the Federal
the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
Reserve Board
Fees
Set-up and
Maintenance Fees
What is the APR for Purchases for
this credit card offer?
14.99%
Is this a variable-rate APR
or a fixed-rate APR?
Variable-rate APR
NOTICE: Some of these set-up and maintenance fees will be assessed before you begin
using your card and will reduce the amount of credit you initially have available. For
example, if you are assigned the minimum credit limit of $250, initial available credit will
be only about $209.

Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)

Additional Card Fee: $5 annually (if applicable)
Transaction Fees

Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is
greater (maximum fee: $100)

Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever
is greater

Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees

Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is
more than $1000

Over-the-limit: $29

Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called “average daily balance (including new
purchases).”
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more
than 60 days late in paying your bill
Introductory Rate
• Introductory rate- APR that
may be charged after a
credit card is opened
• Will have a different APR
(usually higher) after the
introductory period ends
• Not all credit cards have an
introductory rate
Interest Rates and Interest Charges
Annual Percentage
Rate (APR) for
Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your
creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the
market based on the Prime Rate.
APR for Balance
15.99%
Transfers

This APR will vary with the market based on the Prime Rate
APR for Cash
21.99%
Advances

This APR will vary with the market based on the Prime Rate
Penalty APR and
28.99%
When it Applies
This APR may be applied to your account if you:
1.
Make a late payment;
2.
Go over your credit limit;
3.
Make a payment that is returned; or
4.
Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APR’s are increased for any of these
reasons, the Penalty APR will apply until you make six consecutive minimum payments
when due.
How to Avoid Paying Your due date is at least 25 days after the close of each billing cycle. We will not charge
Interest on Purchases you any interest on purchases if you pay your entire balance by the due date each
month.
Minimum Interest
If you are charged interest, the charge will be no less than $1.50.
Charge
For Credit Card Tips
To learn more about factors to consider when applying for or using a credit card, visit
from the Federal
the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
Reserve Board
Fees
What is the introductory rate for
this credit card offer?
The introductory rate
depends on the
creditworthiness of the
applicant, but it will be
12.99%, 13.99%, or 14.99%
Set-up and
Maintenance Fees
NOTICE: Some of these set-up and maintenance fees will be assessed before you begin
using your card and will reduce the amount of credit you initially have available. For
example, if you are assigned the minimum credit limit of $250, initial available credit will
be only about $209.

Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)

Additional Card Fee: $5 annually (if applicable)
Transaction Fees

Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is
greater (maximum fee: $100)

Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever
is greater

Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees

Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is
more than $1000

Over-the-limit: $29

Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called “average daily balance (including new
purchases).”
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more
than 60 days late in paying your bill
Interest Rates and Interest Charges
APR for Balance Transfers &
Cash Advances
• Balance transfer - act of
transferring debt from
one credit card to another
• Cash advance includes
withdrawing cash from an
ATM using a credit card
• Balance transfer and cash
advance fees may also
apply (even if the APR is
0%)
Annual Percentage
Rate (APR) for
Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your
creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the
market based on the Prime Rate.
APR for Balance
15.99%
Transfers

This APR will vary with the market based on the Prime Rate
APR for Cash
21.99%
Advances

This APR will vary with the market based on the Prime Rate
Penalty APR and
28.99%
When it Applies
This APR may be applied to your account if you:
1.
Make a late payment;
2.
Go over your credit limit;
3.
Make a payment that is returned; or
4.
Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APR’s are increased for any of these
reasons, the Penalty APR will apply until you make six consecutive minimum payments
when due.
How to Avoid Paying Your due date is at least 25 days after the close of each billing cycle. We will not charge
Interest on Purchases you any interest on purchases if you pay your entire balance by the due date each
month.
Minimum Interest
If you are charged interest, the charge will be no less than $1.50.
Charge
For Credit Card Tips
To learn more about factors to consider when applying for or using a credit card, visit
from the Federal
the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
Reserve Board
Fees
Set-up and
Maintenance Fees
NOTICE: Some of these set-up and maintenance fees will be assessed before you begin
using your card and will reduce the amount of credit you initially have available. For
example, if you are assigned the minimum credit limit of $250, initial available credit will
be only about $209.

Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)

Additional Card Fee: $5 annually (if applicable)
Transaction Fees

Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is
greater (maximum fee: $100)

Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever
is greater

Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees

Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is
more than $1000

Over-the-limit: $29

Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called “average daily balance (including new
purchases).”
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more
than 60 days late in paying your bill
Penalty APR and
When it Applies
Discloses the penalty APR and
the penalty terms that trigger
it to take effect
• Penalty APR - interest rate
charged on new
transactions if the penalty
terms in the contract are
triggered
What is the Penalty APR for this
credit card offer?
28.99%
Interest Rates and Interest Charges
Annual Percentage
Rate (APR) for
Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your
creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the
market based on the Prime Rate.
APR for Balance
15.99%
Transfers

This APR will vary with the market based on the Prime Rate
APR for Cash
21.99%
Advances

This APR will vary with the market based on the Prime Rate
Penalty APR and
28.99%
When it Applies
This APR may be applied to your account if you:
1.
Make a late payment;
2.
Go over your credit limit;
3.
Make a payment that is returned; or
4.
Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APR’s are increased for any of these
reasons, the Penalty APR will apply until you make six consecutive minimum payments
when due.
How to Avoid Paying Your due date is at least 25 days after the close of each billing cycle. We will not charge
Interest on Purchases you any interest on purchases if you pay your entire balance by the due date each
month.
Minimum Interest
If you are charged interest, the charge will be no less than $1.50.
Charge
For Credit Card Tips
To learn more about factors to consider when applying for or using a credit card, visit
from the Federal
the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
Reserve Board
Fees
Set-up and
Maintenance Fees
NOTICE: Some of these set-up and maintenance fees will be assessed before you begin
using your card and will reduce the amount of credit you initially have available. For
example, if you are assigned the minimum credit limit of $250, initial available credit will
be only about $209.

Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)

Additional Card Fee: $5 annually (if applicable)
Transaction Fees

Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is
greater (maximum fee: $100)

Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever
is greater

Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees

Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is
more than $1000

Over-the-limit: $29

Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called “average daily balance (including new
purchases).”
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more
than 60 days late in paying your bill
Interest Rates and Interest Charges
Annual Percentage
Rate (APR) for
Purchases
How To Avoid Paying
Interest on Purchases
• Explains how you can
avoid interest charges by
paying credit card bills in
full every month
Minimum Interest Charge
• Typically range from $0.50
to $2 per month
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your
creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the
market based on the Prime Rate.
APR for Balance
15.99%
Transfers

This APR will vary with the market based on the Prime Rate
APR for Cash
21.99%
Advances

This APR will vary with the market based on the Prime Rate
Penalty APR and
28.99%
When it Applies
This APR may be applied to your account if you:
1.
Make a late payment;
2.
Go over your credit limit;
3.
Make a payment that is returned; or
4.
Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APR’s are increased for any of these
reasons, the Penalty APR will apply until you make six consecutive minimum payments
when due.
How to Avoid Paying Your due date is at least 25 days after the close of each billing cycle. We will not charge
Interest on Purchases you any interest on purchases if you pay your entire balance by the due date each
month.
Minimum Interest
If you are charged interest, the charge will be no less than $1.50.
Charge
For Credit Card Tips
To learn more about factors to consider when applying for or using a credit card, visit
from the Federal
the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
Reserve Board
Fees
Set-up and
Maintenance Fees
NOTICE: Some of these set-up and maintenance fees will be assessed before you begin
using your card and will reduce the amount of credit you initially have available. For
example, if you are assigned the minimum credit limit of $250, initial available credit will
be only about $209.

Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)

Additional Card Fee: $5 annually (if applicable)
Transaction Fees

Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is
greater (maximum fee: $100)

Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever
is greater

Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees

Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is
more than $1000

Over-the-limit: $29

Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called “average daily balance (including new
purchases).”
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more
than 60 days late in paying your bill
Credit cards may charge
many different types of
fees
Set-up and Maintenance
Fees
• Any set-up and
maintenance fees for
the card
• Annual fee- a yearly
fee that may be
charged for having a
credit card
What is the annual fee
for this credit card?
$20
Interest Rates and Interest Charges
Annual Percentage
Rate (APR) for
Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your
creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the
market based on the Prime Rate.
APR for Balance
15.99%
Transfers

This APR will vary with the market based on the Prime Rate
APR for Cash
21.99%
Advances

This APR will vary with the market based on the Prime Rate
Penalty APR and
28.99%
When it Applies
This APR may be applied to your account if you:
1.
Make a late payment;
2.
Go over your credit limit;
3.
Make a payment that is returned; or
4.
Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APR’s are increased for any of these
reasons, the Penalty APR will apply until you make six consecutive minimum payments
when due.
How to Avoid Paying Your due date is at least 25 days after the close of each billing cycle. We will not charge
Interest on Purchases you any interest on purchases if you pay your entire balance by the due date each
month.
Minimum Interest
If you are charged interest, the charge will be no less than $1.50.
Charge
For Credit Card Tips
To learn more about factors to consider when applying for or using a credit card, visit
from the Federal
the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
Reserve Board
Fees
Set-up and
Maintenance Fees
NOTICE: Some of these set-up and maintenance fees will be assessed before you begin
using your card and will reduce the amount of credit you initially have available. For
example, if you are assigned the minimum credit limit of $250, initial available credit will
be only about $209.

Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)

Additional Card Fee: $5 annually (if applicable)
Transaction Fees

Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is
greater (maximum fee: $100)

Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever
is greater

Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees

Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is
more than $1000

Over-the-limit: $29

Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called “average daily balance (including new
purchases).”
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more
than 60 days late in paying your bill
Interest Rates and Interest Charges
Annual Percentage
Rate (APR) for
Purchases
Transaction Fees
• Discloses any
transaction fees for the
card
• Balance transfer fees
• Cash advance fees
• May be charged
in addition to
APR
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your
creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the
market based on the Prime Rate.
APR for Balance
15.99%
Transfers

This APR will vary with the market based on the Prime Rate
APR for Cash
21.99%
Advances

This APR will vary with the market based on the Prime Rate
Penalty APR and
28.99%
When it Applies
This APR may be applied to your account if you:
1.
Make a late payment;
2.
Go over your credit limit;
3.
Make a payment that is returned; or
4.
Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APR’s are increased for any of these
reasons, the Penalty APR will apply until you make six consecutive minimum payments
when due.
How to Avoid Paying Your due date is at least 25 days after the close of each billing cycle. We will not charge
Interest on Purchases you any interest on purchases if you pay your entire balance by the due date each
month.
Minimum Interest
If you are charged interest, the charge will be no less than $1.50.
Charge
For Credit Card Tips
To learn more about factors to consider when applying for or using a credit card, visit
from the Federal
the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
Reserve Board
Fees
Set-up and
Maintenance Fees
NOTICE: Some of these set-up and maintenance fees will be assessed before you begin
using your card and will reduce the amount of credit you initially have available. For
example, if you are assigned the minimum credit limit of $250, initial available credit will
be only about $209.

Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)

Additional Card Fee: $5 annually (if applicable)
Transaction Fees

Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is
greater (maximum fee: $100)

Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever
is greater

Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees

Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is
more than $1000

Over-the-limit: $29

Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called “average daily balance (including new
purchases).”
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more
than 60 days late in paying your bill
Penalty Fees
• Discloses the penalty fees
for the card (in addition to
Penalty APR)
• Late-payment- charged
when a cardholder does
not make the minimum
monthly payment by the
due date
• Over-the-limit-charged
if the account balance
goes over the set credit
limit
Interest Rates and Interest Charges
Annual Percentage
Rate (APR) for
Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your
creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the
market based on the Prime Rate.
APR for Balance
15.99%
Transfers

This APR will vary with the market based on the Prime Rate
APR for Cash
21.99%
Advances

This APR will vary with the market based on the Prime Rate
Penalty APR and
28.99%
When it Applies
This APR may be applied to your account if you:
1.
Make a late payment;
2.
Go over your credit limit;
3.
Make a payment that is returned; or
4.
Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APR’s are increased for any of these
reasons, the Penalty APR will apply until you make six consecutive minimum payments
when due.
How to Avoid Paying Your due date is at least 25 days after the close of each billing cycle. We will not charge
Interest on Purchases you any interest on purchases if you pay your entire balance by the due date each
month.
Minimum Interest
If you are charged interest, the charge will be no less than $1.50.
Charge
For Credit Card Tips
To learn more about factors to consider when applying for or using a credit card, visit
from the Federal
the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
Reserve Board
Fees
Set-up and
Maintenance Fees
NOTICE: Some of these set-up and maintenance fees will be assessed before you begin
using your card and will reduce the amount of credit you initially have available. For
example, if you are assigned the minimum credit limit of $250, initial available credit will
be only about $209.

Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)

Additional Card Fee: $5 annually (if applicable)
Transaction Fees

Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is
greater (maximum fee: $100)

Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever
is greater

Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees

Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is
more than $1000

Over-the-limit: $29

Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called “average daily balance (including new
purchases).”
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more
than 60 days late in paying your bill
Interest Rates and Interest Charges
Annual Percentage
Rate (APR) for
Purchases
How we calculate your
balance
• Credit card companies can
use one of several methods
to calculate the outstanding
balance on a credit card
What method is used to calculate
the balance on this card?
Average daily balance
(including new purchases)
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your
creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the
market based on the Prime Rate.
APR for Balance
15.99%
Transfers

This APR will vary with the market based on the Prime Rate
APR for Cash
21.99%
Advances

This APR will vary with the market based on the Prime Rate
Penalty APR and
28.99%
When it Applies
This APR may be applied to your account if you:
1.
Make a late payment;
2.
Go over your credit limit;
3.
Make a payment that is returned; or
4.
Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APR’s are increased for any of these
reasons, the Penalty APR will apply until you make six consecutive minimum payments
when due.
How to Avoid Paying Your due date is at least 25 days after the close of each billing cycle. We will not charge
Interest on Purchases you any interest on purchases if you pay your entire balance by the due date each
month.
Minimum Interest
If you are charged interest, the charge will be no less than $1.50.
Charge
For Credit Card Tips
To learn more about factors to consider when applying for or using a credit card, visit
from the Federal
the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
Reserve Board
Fees
Set-up and
Maintenance Fees
NOTICE: Some of these set-up and maintenance fees will be assessed before you begin
using your card and will reduce the amount of credit you initially have available. For
example, if you are assigned the minimum credit limit of $250, initial available credit will
be only about $209.

Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)

Additional Card Fee: $5 annually (if applicable)
Transaction Fees

Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is
greater (maximum fee: $100)

Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever
is greater

Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees

Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is
more than $1000

Over-the-limit: $29

Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called “average daily balance (including new
purchases).”
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more
than 60 days late in paying your bill
Loss of Introductory APR
If the card has an
introductory rate, this area
will list how the lower
introductory rate can be
lost
How can the introductory APR be
lost on this card?
If the cardholder is more than
60 days late in paying the bill
What APR will the
cardholder be charged if the
introductory rate is lost?
The Penalty APR of 28.99%
Interest Rates and Interest Charges
Annual Percentage
Rate (APR) for
Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your
creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the
market based on the Prime Rate.
APR for Balance
15.99%
Transfers

This APR will vary with the market based on the Prime Rate
APR for Cash
21.99%
Advances

This APR will vary with the market based on the Prime Rate
Penalty APR and
28.99%
When it Applies
This APR may be applied to your account if you:
1.
Make a late payment;
2.
Go over your credit limit;
3.
Make a payment that is returned; or
4.
Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APR’s are increased for any of these
reasons, the Penalty APR will apply until you make six consecutive minimum payments
when due.
How to Avoid Paying Your due date is at least 25 days after the close of each billing cycle. We will not charge
Interest on Purchases you any interest on purchases if you pay your entire balance by the due date each
month.
Minimum Interest
If you are charged interest, the charge will be no less than $1.50.
Charge
For Credit Card Tips
To learn more about factors to consider when applying for or using a credit card, visit
from the Federal
the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
Reserve Board
Fees
Set-up and
Maintenance Fees
NOTICE: Some of these set-up and maintenance fees will be assessed before you begin
using your card and will reduce the amount of credit you initially have available. For
example, if you are assigned the minimum credit limit of $250, initial available credit will
be only about $209.

Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)

Additional Card Fee: $5 annually (if applicable)
Transaction Fees

Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is
greater (maximum fee: $100)

Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever
is greater

Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees

Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is
more than $1000

Over-the-limit: $29

Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called “average daily balance (including new
purchases).”
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more
than 60 days late in paying your bill
1.4.1.G1
Credit Card Chaos
Activity Directions:
1. Two credit card terms will be provided
2. Identify which term is true on your credit
card offer
3. Move to the correct side of the room
indicated by the arrow on the slide
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 33
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit Card Chaos
Does your credit card offer have a:
Fixed-rate
APR for
Purchases
OR
Variable-rate
APR for
Purchases
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 34
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit Card Chaos
Does your credit card offer have a:
APR for
Purchases greater
than or equal to
15%
OR
APR for
Purchases
less than 15%
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 35
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit Card Chaos
Does your credit card offer have an
Introductory Rate?
Introductory
Rate
OR
No
Introductory
Rate
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 36
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit Card Chaos
Does your credit card offer have a
Minimum Interest Charge?
Minimum
Interest
Charge
OR
No Minimum
Interest
Charge
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 37
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit Card Chaos
Does your credit card offer have an
Annual Fee?
Annual
Fee
OR
No Annual
Fee
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 38
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit Card Chaos
Does your credit card offer have a
Late Payment Fee?
Late
Payment
Fee
OR
No Late
Payment
Fee
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 39
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit Card Chaos
Does your credit card offer have a
Balance Transfer Fee?
Balance
Transfer
Fee
OR
No Balance
Transfer
Fee
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 40
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit Card Benefits
Cash Rebates
Warranties for
items
purchased
Frequent Flyer
Miles
Travel accident
insurance
Other
benefits?
• Make sure to
know all terms
and conditions
• May charge fees
or higher interest
rates
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 41
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
How do I obtain a credit
card?
Comparison shop for a credit card
Compare
credit card
offers and
determine
which card to
apply for
Complete a credit application
A form
requesting
information
about a
person’s ability
to repay
Lenders conduct a credit investigation
A comparison
of information
on credit
application to
information on
a credit report
Approval?
Applicant may
or may not be
approved
(depends on
creditworthine
ss)
Credit card companies send pre-approved credit
card applications in the mail when the individual
has passed their initial credit check
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 42
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
What is a Credit Card
Statement?
1.4.1.G1
• Outline important information about the card
• 2009 CARD Act required credit card
companies to include specific information
about a card account in the statement
Andrew’s Credit Card Statement
Please help Andrew interpret his credit card statement.
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 43
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Andrew’s Credit Card Statement
Summary of Account Activity
Previous Balance
Payments
Purchases
Balance Transfers
Cash Advances
Past Due Amount
Fees Charged
Interest Charged
New Balance
Summary of Account
Activity
• Overview of credit card
1
Credit Limit
Available credit
Statement closing date
Days in billing cycle
Payment Information
535.07
-450.00
+529.57
+785.00
+318.00
+0.00
+69.45
+10.89
$1,784.53
3
4
If you make no
additional charges using
this card and each
month you pay…
Only the minimum
payment
$62
$2,000.00
$215.47
3/22/2012
30
You will pay off the
balance shown on this
statement in about…
And you will end up
paying an estimated
total of…
Summary of Account Activity
10 years
$3,284
3 years
$2,232
Previous Balance Important Changes to Your
535.07
Account Terms
6
5
The
following
is
a
summary
of
changes
that are being made to your
Payments
-450.00
account terms. For more detailed information, please refer to the
booklet enclosed with this statement.
These changes will impact
Purchases
+529.57
your account as follows:
4/9/12: As of 5/10/12, APR for
Balance Transfers Transactions made on or after+785.00
Purchases will increase to 16.99%.
Transactions
made
before
4/9/12:
Current APRs will continue to
Cash Advances
+318.00
apply to these transactions.
Past Due Amount
+0.00
Transactions
7
+69.45 Amount
Trans Fees Charged
Description of Transaction or Credit
Post Date
Date
Interest
Charged
+10.89
Store #1
$529.57
2/22
2/23
Payment
$450.00 2/25
2/26
New
Balance
$1,784.53
Cash Advance
$318.00
2/26
2/26
Notice of Changes to Your Interest Rates
You have triggered the Penalty APR of 28.99%. This change will
impact your account as follows:
Transactions made on or after 4/9/12: As of 5/10/12, the Penalty
APR will apply to these transactions. We may keep the APR at this
level indefinitely.
Transactions made before 4/9/12: Current rates will continue to
apply to these transactions. If you become more than 60 days late on
your account, the Penalty APR will apply to hose transactions as well.
Reference Number
XXXX1
XXXX2
XXXX3
XXXX4
3/15
Balance Transfer
3/17
Fees
XXXX5
XXXX6
XXXX7
2/23
2/27
2/28
Credit
2/23 Limit Late Fee
Balance Transfer Fee
2/27
Available
credit
Cash Advance Fee
2/28
Total Fees for this Period
Statement closing
date
Interest Charged
$785.00
$2,000.00
$215.47
8
3/22/2012
Interest Charge on Purchases
Interest Charge on Cash Advances
Total Interest for this Period
Days in billing cycle
How much did Andrew charge in
new purchases during this credit
card billing cycle?
$529.57
2
New Balance
$1784.53
Minimum Payment Due
$53.00
Payment Due Date
4/20/12
Late Payment Warning: If we do not receive your minimum payment by the date listed
above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty
rate of 28.99%
Minimum Payment Warning: If you make only the minimum payment each period, you
will pay more in interest and it will take you longer to pay off your balance. For example…
$6.31
$4.58
$10.89
30
2012 Totals Year-to-Date
Total fees charged in 2012
Total interest charged in 2012
$35.00
$23.55
$10.90
$69.45
$90.14
$18.27
9
Interest Charge Calculation
Type of Balance
Purchases
Cash Advances
Balance Transfers
Annual Percentage Rate (APR)
14.99%
21.99%
0.00%
10
Balance Subject to Interest Rate
$512.14
$253.50
$637.50
Interest Charge
$6.31
$4.58
$0.00
•
•
•
•
•
Payment Information
Total new balance
Minimum payment
amount
Date payment is due
Payment due dates must
be consistent month to
month
Monthly statements must
be sent at least 21 days
before payment is due
What is Andrew’s minimum
payment due for this billing cycle?
Andrew’s Credit Card Statement
Summary of Account Activity
Previous Balance
Payments
Purchases
Balance Transfers
Cash Advances
Past Due Amount
Fees Charged
Interest Charged
New Balance
1
Credit Limit
Available credit
Statement closing date
Days in billing cycle
Payment Information
535.07
-450.00
+529.57
+785.00
+318.00
+0.00
+69.45
+10.89
$1,784.53
3
4
2
New Balance
$1784.53
Minimum Payment Due
$53.00
Payment Due Date
4/20/12
Late Payment Warning: If we do not receive your minimum payment by the date listed
above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty
rate of 28.99%
Minimum Payment Warning: If you make only the minimum payment each period, you
will pay more in interest and it will take you longer to pay off your balance. For example…
If you make no
additional charges using
this card and each
month you pay…
Only the minimum
payment
$62
$2,000.00
$215.47
3/22/2012
30
You will pay off the
balance shown on this
statement in about…
And you will end up
paying an estimated
total of…
Payment Information10 years
$3,284
New Balance
$1784.53
3 years
$2,232
Minimum Payment Due
$53.00
Changes to Your Account Terms
Notice of Changes to Your Interest Rates
6
5 Important
Due
4/20/12
You Payment
have triggered the
PenaltyDate
APR of 28.99%. This change will
The following is a summary of changes that are being
made to your
impact your account as follows:
account terms. For more detailed information, please refer to the
Late made
Payment
Warning:
If we
do not receive
your
payment
by
Transactions
on or after 4/9/12:
As of 5/10/12,
the Penalty
booklet enclosed
with minimum
this statement. These
changes will impact
APR will apply to these transactions. We may keep the APR at this
your account as follows:
the date listed above, you may have to Transactions
pay a $35
fee and your APR’s may
level indefinitely.
made on or after 4/9/12: As of 5/10/12, APR for
Transactions
made before 4/9/12:
Current
rates
will continuerate
to
Purchases will increase to 16.99%.
be
increased
up
to
the
Penalty
of
28.99%
apply to these transactions. If you become more than 60 days late on
Transactions made before 4/9/12: Current APRs will continue to
yourMinimum
account, the Penalty
APR will apply to
hose transactions
well. make
apply only
to these the
transactions.
Payment
Warning:
Ifasyou
minimum payment
each period, you will pay more inTransactions
interest and7it will take you longer to
Trans
pay off
your balance.
For
Description of Transaction or Credit
Amount
Reference
Number
Post example…
Date
XXXX1
XXXX2
XXXX3
XXXX4
XXXX5
XXXX6
XXXX7
Date
2/22
2/23
2/26
If you2/25
make
no
2/26
2/26
additional
3/15 charges
3/17
Store #1
Payment
Cash Advance
Balance Transfer
You will pay off the
balanceFees
shown on
Late
Fee
this statement in
Balance Transfer Fee
Cashabout…
Advance Fee
using this card
2/23
2/23
and each
2/27 month
2/27
2/28
you
pay… 2/28
Only the
minimum
payment
$62
Total Fees for this Period
And you will end
up paying an
estimated total
8of…
$529.57
$450.00 $318.00
$785.00
$35.00
$23.55
$10.90
$69.45
Interest Charged
Interest Charge on Purchases
Interest Charge on Cash Advances
Total Interest for this Period
10 years
$3,284
3 years
2012 Totals
Year-to-Date
$2,232
Total fees charged in 2012
Total interest charged in 2012
$90.14
$18.27
$6.31
$4.58
$10.89
9
Interest Charge Calculation
$53.00
Type of Balance
Purchases
Cash Advances
Balance Transfers
Annual Percentage Rate (APR)
14.99%
21.99%
0.00%
10
Balance Subject to Interest Rate
$512.14
$253.50
$637.50
Interest Charge
$6.31
$4.58
$0.00
Late Payment Warning
• What will happen if a
payment is late- usually
additional fees and a
higher interest rate
Minimum Payment Warning
• Estimate of how long it
can take to pay off
balance if only the
minimum payment is
made
How long will it take Andrew to
pay off the balance of his credit
card if he only pays the minimum
payment?
10 years
Andrew’s Credit Card Statement
Summary of Account Activity
Previous Balance
Payments
Purchases
Balance Transfers
Cash Advances
Past Due Amount
Fees Charged
Interest Charged
New Balance
1
Credit Limit
Available credit
Statement closing date
Days in billing cycle
Payment Information
535.07
-450.00
+529.57
+785.00
+318.00
+0.00
+69.45
+10.89
$1,784.53
3
4
2
New Balance
$1784.53
Minimum Payment Due
$53.00
Payment Due Date
4/20/12
Late Payment Warning: If we do not receive your minimum payment by the date listed
above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty
rate of 28.99%
Minimum Payment Warning: If you make only the minimum payment each period, you
will pay more in interest and it will take you longer to pay off your balance. For example…
If you make no
additional charges using
this card and each
month you pay…
Only the minimum
payment
$62
$2,000.00
$215.47
3/22/2012
30
You will pay off the
balance shown on this
statement in about…
And you will end up
paying an estimated
total of…
Payment Information10 years
$3,284
New Balance
$1784.53
3 years
$2,232
Minimum Payment Due
$53.00
Changes to Your Account Terms
Notice of Changes to Your Interest Rates
6
5 Important
Due
4/20/12
You Payment
have triggered the
PenaltyDate
APR of 28.99%. This change will
The following is a summary of changes that are being
made to your
impact your account as follows:
account terms. For more detailed information, please refer to the
Late made
Payment
Warning:
If we
do not receive
your
payment
by
Transactions
on or after 4/9/12:
As of 5/10/12,
the Penalty
booklet enclosed
with minimum
this statement. These
changes will impact
APR will apply to these transactions. We may keep the APR at this
your account as follows:
the date listed above, you may have to Transactions
pay a $35
fee and your APR’s may
level indefinitely.
made on or after 4/9/12: As of 5/10/12, APR for
Transactions
made before 4/9/12:
Current
rates
will continuerate
to
Purchases will increase to 16.99%.
be
increased
up
to
the
Penalty
of
28.99%
apply to these transactions. If you become more than 60 days late on
Transactions made before 4/9/12: Current APRs will continue to
yourMinimum
account, the Penalty
APR will apply to
hose transactions
well. make
apply only
to these the
transactions.
Payment
Warning:
Ifasyou
minimum payment
each period, you will pay more inTransactions
interest and7it will take you longer to
Trans
pay off
your balance.
For
Description of Transaction or Credit
Amount
Reference
Number
Post example…
Date
XXXX1
XXXX2
XXXX3
XXXX4
XXXX5
XXXX6
XXXX7
Date
2/22
2/23
2/26
If you2/25
make
no
2/26
2/26
additional
3/15 charges
3/17
Store #1
Payment
Cash Advance
Balance Transfer
You will pay off the
balanceFees
shown on
Late
Fee
this statement in
Balance Transfer Fee
Cashabout…
Advance Fee
using this card
2/23
2/23
and each
2/27 month
2/27
2/28
you
pay… 2/28
Only the
minimum
payment
$62
Total Fees for this Period
And you will end
up paying an
estimated total
8of…
$529.57
$450.00 $318.00
$785.00
$35.00
$23.55
$10.90
$69.45
Interest Charged
Interest Charge on Purchases
Interest Charge on Cash Advances
Total Interest for this Period
10 years
$3,284
3 years
2012 Totals
Year-to-Date
$2,232
Total fees charged in 2012
Total interest charged in 2012
$90.14
$18.27
$6.31
$4.58
$10.89
9
Interest Charge Calculation
Type of Balance
Purchases
Cash Advances
Balance Transfers
Annual Percentage Rate (APR)
14.99%
21.99%
0.00%
10
Balance Subject to Interest Rate
$512.14
$253.50
$637.50
Interest Charge
$6.31
$4.58
$0.00
Andrew’s Credit Card Statement
Summary of Account Activity
Notice of Changes to Your
Interest Rates
• If the Penalty APR is
triggered, cardholder
must be notified that their
rates will be increasing
Previous Balance
Payments
Purchases
Balance Transfers
Cash Advances
Past Due Amount
Fees Charged
Interest Charged
New Balance
1
Credit Limit
Available credit
Statement closing date
Days in billing cycle
Payment Information
535.07
-450.00
+529.57
+785.00
+318.00
+0.00
+69.45
+10.89
$1,784.53
$2,000.00
$215.47
3/22/2012
30
3
4
2
New Balance
$1784.53
Minimum Payment Due
$53.00
Payment Due Date
4/20/12
Late Payment Warning: If we do not receive your minimum payment by the date listed
above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty
rate of 28.99%
Minimum Payment Warning: If you make only the minimum payment each period, you
will pay more in interest and it will take you longer to pay off your balance. For example…
If you make no
You will pay off the
And you will end up
additional charges using
balance shown on this
paying an estimated
this card and each
statement in about…
total of…
month you pay…
Only the minimum
10 years
$3,284
payment
$62
3 years
$2,232
6
5 Important Changes to Your Account Terms
Notice of Changes to Your Interest Rates
Notice of Changes to Your Interest Rates
You have triggered the Penalty APR of 28.99%. This change will
impact your account as follows:
Transactions made on or after 4/9/12: As of 5/10/12, the Penalty
APR will apply to these transactions. We may keep the APR at this
level indefinitely.
Transactions made before 4/9/12: Current rates will continue to
apply to these transactions. If you become more than 60 days late on
your account, the Penalty APR will apply to hose transactions as well.
The following is a summary of changes that are being made to your
account terms. For more detailed information, please refer to the
booklet enclosed with this statement. These changes will impact
your account as follows:
Transactions made on or after 4/9/12: As of 5/10/12, APR for
Purchases will increase to 16.99%.
Transactions made before 4/9/12: Current APRs will continue to
apply to these transactions.
You have triggered the Penalty APR of 28.99%. This change will impact
your account as follows:
Transactions
Transactions made
on or after 4/9/12:
As of7 5/10/12, the Penalty APR
Trans
Description of Transaction or Credit
Amount
Post Date
Date
will apply to these transactions.
We may keep the APR at this level $529.57
Store #1
XXXX1
2/22
2/23
Payment
$450.00 indefinitely. 2/25
XXXX2
2/26
Cash Advance
$318.00
XXXX3
2/26
2/26
Transactions made
before
4/9/12:
Current rates will continue to apply
Balance Transfer
$785.00
XXXX4
3/15
3/17
Feesmore than 60 days late on your
to these transactions. If you become
Late Fee
$35.00
XXXX5
2/23
2/23
account, the Penalty
APR
to hose
transactions as well.
Balance Transfer
Fee
$23.55
XXXX6
2/27
2/27 will apply
Reference Number
Has Andrew triggered
the Penalty APR?
Yes, he will pay 28.99% on all
transactions made after 4/9/12.
XXXX7
2/28
Cash Advance Fee
Total Fees for this Period
2/28
8
$10.90
$69.45
Interest Charged
Interest Charge on Purchases
Interest Charge on Cash Advances
Total Interest for this Period
$6.31
$4.58
$10.89
2012 Totals Year-to-Date
Total fees charged in 2012
Total interest charged in 2012
$90.14
$18.27
9
Interest Charge Calculation
Type of Balance
Purchases
Cash Advances
Balance Transfers
Annual Percentage Rate (APR)
14.99%
21.99%
0.00%
10
Balance Subject to Interest Rate
$512.14
$253.50
$637.50
Interest Charge
$6.31
$4.58
$0.00
Important Changes to Your
Account Terms
• Must be notified of any
significant changes at
least 45 days before the
changes take effect
• Any changes can only
apply to new charges
• Account can be closed
before the changes go
into effect
Other than implementation of
the Penalty APR, will there be
any other changes to
Andrew’s account terms?
Yes, his APR for Purchases is
increasing to 16.99%.
Andrew’s Credit Card Statement
Summary of Account Activity
Previous Balance
Payments
Purchases
Balance Transfers
Cash Advances
Past Due Amount
Fees Charged
Interest Charged
New Balance
Payment Information
535.07
-450.00
+529.57
+785.00
+318.00
+0.00
+69.45
+10.89
$1,784.53
1
Credit Limit
Available credit
Statement closing date
Days in billing cycle
3
4
2
New Balance
$1784.53
Minimum Payment Due
$53.00
Payment Due Date
4/20/12
Late Payment Warning: If we do not receive your minimum payment by the date listed
above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty
rate of 28.99%
Minimum Payment Warning: If you make only the minimum payment each period, you
will pay more in interest and it will take you longer to pay off your balance. For example…
If you make no
additional charges using
this card and each
month you pay…
Only the minimum
payment
$62
$2,000.00
$215.47
3/22/2012
30
You will pay off the
balance shown on this
statement in about…
And you will end up
paying an estimated
total of…
10 years
$3,284
3 years
$2,232
6
5 Important Changes to Your Account Terms
Important Changes to Your Account Terms
Notice of Changes to Your Interest Rates
You have triggered the Penalty APR of 28.99%. This change will
impact your account as follows:
Transactions made on or after 4/9/12: As of 5/10/12, the Penalty
APR will apply to these transactions. We may keep the APR at this
level indefinitely.
Transactions made before 4/9/12: Current rates will continue to
apply to these transactions. If you become more than 60 days late on
your account, the Penalty APR will apply to hose transactions as well.
The following is a summary of changes that are being made to your
account terms. For more detailed information, please refer to the
booklet enclosed with this statement. These changes will impact
your account as follows:
Transactions made on or after 4/9/12: As of 5/10/12, APR for
Purchases will increase to 16.99%.
Transactions made before 4/9/12: Current APRs will continue to
apply to these transactions.
The following is a summary of changes that are being made to your
account terms. For more detailed information, please refer to the booklet
enclosed with this statement. These changes will impact your account as
Transactions
7
follows:
Trans
Reference Number
Post Date
Description of Transaction or Credit
XXXX1
XXXX2
XXXX3
XXXX4
Date
2/22
2/25
2/26
3/15
2/23
2/26
2/26
3/17
Store #1
Payment
Cash Advance
Balance Transfer
XXXX7
2/28
2/28
Cash Advance Fee
Total Fees for this Period
Amount
$529.57
Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases
$450.00 $318.00
will increase to 16.99%.
$785.00
Transactions made before 4/9/12: Current
APRs will continue to apply to
Fees
Late Fee
$35.00
XXXX5 transactions.
2/23
2/23
these
Balance Transfer Fee
$23.55
XXXX6
2/27
2/27
8
$10.90
$69.45
Interest Charged
Interest Charge on Purchases
Interest Charge on Cash Advances
Total Interest for this Period
$6.31
$4.58
$10.89
2012 Totals Year-to-Date
Total fees charged in 2012
Total interest charged in 2012
$90.14
$18.27
9
Interest Charge Calculation
Type of Balance
Purchases
Cash Advances
Balance Transfers
Annual Percentage Rate (APR)
14.99%
21.99%
0.00%
10
Balance Subject to Interest Rate
$512.14
$253.50
$637.50
Interest Charge
$6.31
$4.58
$0.00
Andrew’s Credit Card Statement
Summary of Account Activity
Transactions
• List of all transactions
since the last statement
• Should be reviewed for
errors
Fees and Interest Charged
• Fees and interest charges
must be listed separately
Previous Balance
Payments
Purchases
Balance Transfers
Cash Advances
Past Due Amount
Fees Charged
Interest Charged
New Balance
1
535.07
-450.00
+529.57
+785.00
+318.00
+0.00
+69.45
+10.89
$1,784.53
Payment Information
3
4
2
New Balance
$1784.53
Minimum Payment Due
$53.00
Payment Due Date
4/20/12
Late Payment Warning: If we do not receive your minimum payment by the date listed
above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty
rate of 28.99%
Minimum Payment Warning: If you make only the minimum payment each period, you
will pay more in interest and it will take you longer to pay off your balance. For example…
Transactions
If you make no
You will pay off the
And you will end up
charges using
Reference
Trans
Post additional
Description
ofshown on this
balance
paying an estimated
this card and each
Amount
statement in about…
total of…
Credit
Limit
you pay…
Number
Date$2,000.00Date month
Transaction
or Credit
Available credit
$215.47
Only the minimum
10 years
$3,284
XXXX1closing date 2/223/22/2012
2/23
Store
$529.57
payment#1
Statement
$62
3 years
$2,232
Days in billing cycle
30
XXXX2
2/25
2/26
Payment
$450.00 Important Changes to Your Account Terms
XXXX3
2/26
Cash Advance
$318.00
Notice
of Changes to2/26
Your Interest
Rates
6
5
You have triggered the Penalty APR of 28.99%. This change will
The following is a summary of changes that are being made to your
XXXX4
3/15
3/17
Balanceaccount
Transfer
$785.00
impact
your account as follows:
terms. For more detailed information, please refer
to the
Transactions made on or after 4/9/12: As of 5/10/12, the Penalty
enclosed with this statement. These changes will impact
Feesbooklet
APR will apply to these transactions. We may keep the APR at this
your account as follows:
level
indefinitely.
for
XXXX5
2/23
2/23
Late FeeTransactions made on or after 4/9/12: As of 5/10/12, APR$35.00
Transactions made before 4/9/12: Current rates will continue to
Purchases will increase to 16.99%.
apply
to these transactions. 2/27
If you become more
than 60 days late
on
Transactions
made
before 4/9/12: Current APRs will continue
to
XXXX6
2/27
Balance
Transfer
Fee
$23.55
your account, the Penalty APR will apply to hose transactions as well.
apply to these transactions.
XXXX7
2/28
2/28
Cash Advance Fee
$10.90
Transactions
7
Total
Fees
for
this
$69.45
Trans
Description of Transaction or Credit
Amount
Reference Number
Post Date
Date
Period
Store #1
$529.57
XXXX1
2/22
2/23
Interest
Payment Charged
$450.00 XXXX2
2/25
2/26
Cash
Advance Charge on
$318.00
XXXX3
2/26
2/26
Interest
$6.31
Balance Transfer
$785.00
XXXX4
3/15
3/17
Purchases
Fees
Late
Fee
$35.00
XXXX5
2/23
2/23
Interest
Charge on Cash
$4.58
Balance Transfer Fee
$23.55
XXXX6
2/27
2/27
Advances
Cash
Advance Fee
$10.90
XXXX7
2/28
2/28
8
Total
Fees for
this Period for this
$69.45
Total
Interest
$10.89
Interest Charged
Period
Interest
Charge on Purchases
$6.31
Interest Charge on Cash Advances
Total Interest for this Period
2012 Totals Year-to-Date
2012 Totals Year-to-Date
Total
fees
charged
in 2012
Total fees charged in 2012
Total interest charged in 2012
Total interest charged in 2012
Did Andrew pay a late fee?
Yes, he paid $35.00 for a late fee.
$4.58
$10.89
9
$90.14
$18.27
$90.14
$18.27
Interest Charge Calculation
Type of Balance
Purchases
Cash Advances
Balance Transfers
Annual Percentage Rate (APR)
14.99%
21.99%
0.00%
10
Balance Subject to Interest Rate
$512.14
$253.50
$637.50
Interest Charge
$6.31
$4.58
$0.00
Year-to-Date Totals
• Total amount paid in fees
and interest charges for
the current year
What is the total amount of
interest Andrew has paid in the
year 2012?
$18.27
Interest Charge Calculation
• Summary of the different
types of transactions
Andrew’s Credit Card Statement
Summary of Account Activity
Previous Balance
Payments
Purchases
Balance Transfers
Cash Advances
Past Due Amount
Fees Charged
Interest Charged
New Balance
Payment Information
535.07
-450.00
+529.57
+785.00
+318.00
+0.00
+69.45
+10.89
$1,784.53
2
Transactions
Reference
Trans
Post
Description of
Amount
3
Number
Date
Date
Transaction or Credit
12/22 2/23 Store #1
XXXX1
$529.57
XXXX2
2/25
2/264
Payment
$450.00
If you make no
You will pay off the
And you will end up
additional
charges
using
XXXX3
2/26
2/26
Cash Advance balance shown on this
paying an$318.00
estimated
this card and each
total of…
Credit Limit
month you pay…
XXXX4
3/15 $2,000.00
3/17
Balance
Transferstatement in about…
$785.00
Available credit
$215.47
Only the minimum
10 years
$3,284
Fees
payment
Statement closing date
3/22/2012
3 years
$2,232
Days in billing cycle
30
XXXX5
2/23
2/23
Late$62Fee
$35.00
XXXX6
2/27
2/27
Balance Transfer
Fee to Your Account Terms$23.55
Important Changes
Notice of Changes to
Your Interest
Rates
6
5Advance
You have triggered the Penalty APR of 28.99%. This change will
The following is a summary of changes that are being made to your
XXXX7
2/28
2/28
Cash
Fee
$10.90
impact your account as follows:
account terms. For more detailed information, please refer to the
Transactions made on or after 4/9/12: As of 5/10/12, the Penalty
booklet
impact
Total Fees
forenclosed
thiswith this statement. These changes will$69.45
APR will apply to these transactions. We may keep the APR at this
your account as follows:
level indefinitely.
Period Transactions made on or after 4/9/12: As of 5/10/12, APR for
Transactions made before 4/9/12: Current rates will continue to
Purchases will increase to 16.99%.
apply to these transactions. If you become more than 60Interest
days late on Charged
Transactions made before 4/9/12: Current APRs will continue to
your account, the Penalty APR will apply to hose transactions as well.
apply to these transactions.
Interest Charge
on
$6.31
Transactions
Purchases
7
Trans
Description of Transaction or Credit
Amount
Reference Number
Post Date Interest
Charge on Cash
$4.58
Date
Store #1
$529.57
XXXX1
2/22
2/23
Advances
Payment
$450.00 XXXX2
2/25
2/26
Cash Advance
$318.00
Total
Interest for this
$10.89
XXXX3
2/26
2/26
Balance Transfer
$785.00
XXXX4
3/15
3/17
Period
Fees
XXXX5
XXXX6
XXXX7
2/23
2/27
2/28
New Balance
$1784.53
Minimum Payment Due
$53.00
Payment Due Date
4/20/12
Late Payment Warning: If we do not receive your minimum payment by the date listed
above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty
rate of 28.99%
Minimum Payment Warning: If you make only the minimum payment each period, you
will pay more in interest and it will take you longer to pay off your balance. For example…
2/23
2/27
2/28
Late Fee
Transfer Fee
2012Balance
Totals
Year-to-Date
Cash Advance Fee
Total
Fees
for
this Period
Total fees charged in 2012
Interest Charged
Total interest charged Interest
in 2012
Charge on Purchases
8
$90.14
$18.27
Interest Charge on Cash Advances
Total Interest for this Period
2012 Totals Year-to-Date
Interest Charge Calculation
Annual Percentage
Balance Subject to
Interest Charge Calculation
Rate (APR)
Interest Rate
Annual Percentage Rate (APR)
Balance Subject to Interest Rate
14.99%
$512.14
14.99%
$512.14
21.99%
$253.50
10
21.99%
$253.50
0.00%
$637.50
0.00%
$637.50
Total fees charged in 2012
Total interest charged in 2012
Why is it important to
understand how to read a credit
card statement?
Type of
Balance
Type of Balance
Purchases
Purchases
Cash Advances
Cash
Advances
Balance Transfers
Balance
Transfers
$90.14
$18.27
$35.00
$23.55
$10.90
$69.45
$6.31
$4.58
$10.89
9
Interest
Charge
Interest Charge
$6.31
$6.31
$4.58
$4.58
$0.00
$0.00
1.4.1.G1
Cardholder Protections &
Rights
Truth in Lending Act
Protects from unauthorized credit card charges
If the actual credit card was
used
If only the card number was
used
Cardholder liability is
limited to $50.00
Cardholder has no liability
MUST write a letter within 60 days
of the bill containing the error
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 51
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Cardholder Protections &
Rights
2009 CARD Act
Provides various
protections for
cardholders
Must be 21
years or older
to receive a
credit card
If you are
under 21
Obtain a cosigner
A co-signer is equally
responsible for the
loan
Show proof of
sufficient
income to make
payments
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 52
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Cardholder Protections &
Rights
2009 CARD Act- protection from increasing
interest rates
Cannot increase rates for the
first 12 months after an
account is open unless:
Card has a variable interest
rate
Cardholder is more than 60
days late in paying their bill
Card has an introductory
rate (the introductory rate
must be in place for at least
6 months and then the rate
can increase)
Interest rates on existing balances generally can’t be
raised unless a cardholder is 60 days or more past due
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 53
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Cardholder Protections &
Rights
2009 CARD Act- protection from over-thelimit fees
Cardholders have to “opt-in” to allowing
transactions that take them over their credit limit
If set-up and
maintenance fees
are charged before
the card is used
These non-penalty
fees cannot exceed
25% of the initial
credit limit
For example, if a
card has a credit
limit of $1,000 the
total fees for the
first year (not
including penalty
fees) cannot exceed
$250
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 54
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Cardholder Protection &
Rights
1.4.1.G1
Fair Credit Billing Act
Protects from broken, undelivered, unsatisfied
purchases made with credit cards
• Allows the consumer to not pay for a product or
service for which the consumer has a complaint
• Any amount of money above the $50.00 fee that
consumers are responsible for will be issued back
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 55
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Credit Card
Safety Tips
Sign card with a
signature and
“Please see I.D.”
Do not leave cards
lying around, and
report lost/stolen
cards promptly
Close unwanted
accounts by writing
and phone then cut
up the card
Do not give out
account numbers
unless making a
purchase
Keep a list of all cards,
account numbers, and
phone lists separate
from cards
Shred all preapproved credit card
offers, applications,
or solicitations
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 56
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Online Shopping Safety Tips
1. Use a temporary credit card number
– This is a one-time use only number
– A set amount will be charged to your credit card
– Then a number will be given to you to do your
shopping
2. Use a credit card rather than a debit card
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 57
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Summary
A credit card is pre-approved credit which
can be used for the purchase of goods and
services now and payment of them later
To avoid paying interest on a credit card,
pay the balance in full every month
A credit card can have a positive or a
negative impact on an individual’s credit
history
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 58
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.4.1.G1
Summary
Credit card companies are required to disclose
the terms and fees of a credit card in the
Schumer’s box
Credit card statements outline important
information about a credit card and should be
checked carefully for errors
Consumers have many protections
and rights in regards to credit card use
© Family Economics & Financial Education – Updated May 2011 – Credit Unit – Understanding a Credit Card – Slide 59
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona