Safer to carry
than cash
If used properly,
they can help
establish a good
credit report
(employers often check your
credit report before hiring)
Helpful in
emergencies
Offer purchase
protection
•96% have Credit
Cards
•The average student
has 6 credit cards
•The average credit
card balance is
$3262!!!
salliemae.org
•Increases impulsive
spending
•Ties up future cash
•Leads to
overspending
Let’s say that you see a coat marked down
from $220 to $180. Wow, What a bargain!
But you sadly don’t even have the $180, but
wait, you do have a credit card…so you
CHARGE IT!
With your part-time job, you can pay $15 a
month. OOPS! You paid late one month so
the credit card company charged you a late
fee of $30.
•After 16 months of
paying $15 you own the
jacket.
•Ultimately the jacket
cost you $228.26- $8.26 more
than its full price.
•And the jacket is no
longer in style!
START A BUDGET-List your money
sources.
• Paychecks, money
from gifts
•Follow the Pay
yourself first rule:
Financial advisors
recommend that you
save 10% of all your
income
For one month, keep track
of where you spend your
money
•Use a personal money
tracker for one monthyoucandealwithit.com
•Develop categories
for your spending.
•Set up a budget using your findings and
predict your spending for one month.
•Test your budget by comparing your
predictions with your actual expenses
•Adjust accordingly for the next month.
Here are some tactics that Credit Card companies try
to reel you in with…
•Appealing to your social
conscience, ex. The American
Express Red card donates 1% of
your spending to charity.
•Advertising some spectacular
“benefits” up front- when you get
a credit card offer in the mail,
you see the 0.0% number on it
and some might think “It’s free
money!” but this only applies for a
short time.
•Mixing your desire to spend time with your family- the old family board
game, The Game of Life, now has a new addition to the game: Visa
cards.
•Distributing a lot of “points” that don’t provide strong merchandise
choice.- they say that if you buy more, you’ll receive points, and when
you earn enough you can exchange them for a variety of items. The
catch is, you have a limited variety you can choose from and you have
to spend thousands of dollars to get it.
Now, credit card companies are trying to
target pre-teen girls. They have created a
Hello Kitty credit card!
Be Smart.
SUMMARY:
• Use credit wisely when necessary.
• Budget to avoid having to use credit cards.
• Don’t be lured in by credit card companies.
Don’t let credit card debt become your
financial handcuffs!