Introduction to Credit

Intro to CreditLearning Targets! Define creditComprehend Interest FeesBasic understanding of credit debt Analyze a Credit Statement

Survey on CreditTake 3 minutes and fill out your survey

Speed Dating Time! You know the drill, set up your lines.Bring your survey with you and stand across from another person in two parallel lines

What is a credit card?Dale: "A credit card is a card that doesn't hold money, but every time you use it puts like a list of stuff and then they take the money out of the bank. Why do people use credit?Dora: "You can have a lot more money on it than fits in all your purses." How do you get a credit card? Jamie: "You get it from your Mom and DadWho cant get credit?Casey: "Babies, poor people and hobos, or anybody that has been like in prison or you're a felony person or something." How do you know if you need a credit card?Troy: "When you're getting bored walking around with hundreds of dollars in your pockets

So What is Credit?Credit is the supplying of money, goods, or services at present, in exchange for the promise of future payment.

It is the concept of borrowing money from a bank and paying it back monthlywhat else does this sound like that we talked about in our budgets?! For your automobile

Advantages/Disadvantages of Credit Terms to DefineCreditor/Lender: The business or organization that extends the credit Examples: an individual, a credit card issuer, a bank, or even a corporation

Principle: The original amount of money borrowed

Interest: A percentage rate applied to borrowed moneyThe principal way in which card issuers generate revenuecharging the cardholder interest over the time the money remains borrowedInterest TermsFixed Rate: Interest rate that stays the same

Adjustable/Variable Rate: Interest rate that can change

Security Interest/Collateral: Security interest on certain securities/assets which can be repossessed in the event that timely obligation payments are not met. created by agreement or by operation of law over assets9Interest ExampleSay you racked up $2,500 on your credit card! But wait, you cant afford that!?Dont worry, the credit company is so nice they only make you pay $250 of it each month ..But with a 18% interest rateIf you only make the minimum payment every month on the card, it will take you 17 years (your whole life so far!) to pay it off at a total cost of $5,673.22. Of course, thats only true if you also cut up the card and never use it again!Credit Debt Dont get tricked into zero % interest rates and great deals! Theres almost ALWAYS a catch in the fine print.

Try not to open multiple credit cards with stores (Costco, Macys, Target, etc.) because you will be juggling multiple cards, payments, interest rates, etc., they plan for you to mess up!

Just because you pay off your debt, does not mean your credit history is wiped clean instantly.

***Heres the worlds biggest secret for staying out of debt. You excited to find out??....

http://www.practicalmoneyskills.com/flash/bank_tutor/index.html

With a partner or alone, analyze the credit statement given to you and answer the worksheet. -Everyone fill out their own worksheet please! Analyzing a Credit Statement

Parts of a Credit Cardhttp://www.creditcards.com/credit-card-news/anatomy-of-a-credit-card-1267.php

Why is the CVV (Card Verification Value) important?

What else can we put on the signature line besides a signature?

Howd We Do?!Define credit Comprehend Interest FeesBasic understanding of credit debt Analyze a Credit Statement