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1.6.1.G1 Take Charge of Credit Cards Introductory Level

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Page 1: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

Take Charge of Credit Cards

Introductory Level

Page 2: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

What have you heard?

Page 3: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

What do you

want to know?

Page 4: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.6.1.G1

Page 5: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.6.1.G1

Page 6: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

What is Interest?Interest is the price of money

When referring to credit, interest is the chargefor borrowing money

The average balance

per open credit card

is $1,157

Interest cancause stress

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Page 7: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

U.S. credit card debt is

$880.5 Billion

July 2014, Nerdwallet

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Page 8: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

U.S. households that

have credit card debt

owed an

average of $15,799

1.6.1.G1

Page 9: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

What is a Credit Card?

Plastic card that holds pre-approved credit

Credit Limit- maximum amount of money that can be charged on the card

Purchase items now

Pay later

1.6.1.G1

Page 10: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

34% of Americans

reported paying only the

minimum credit card

payment

1.6.1.G1

Page 11: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Credit Card Payments

Minimum Payment- minimum amount of a credit card bill

that must be paid every month

Pay total amount owed OR

Make smaller payments- equal or

unequal

What do you think is the best payment option?

1.6.1.G1

Page 12: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.6.1.G1

Page 13: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

The average value per

credit card transaction is

$76 for consumers

1.6.1.G1

Page 14: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

10%

APR 15%

APR

Credit Card Interest

Why would someone choose a card with an APR of 10%

instead of 15%?

Page 15: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Melissa

Paid full amount owed

$500

Took 1 month to pay off

Paid $0 in interest

Total Paid $500

Skylar

Paid minimum due $50

Took 3 years to pay off

Paid $104 in interest

Total Paid $604

What would you do with an extra $104?

Melissa and Skylar each purchased a plane ticket for $500 using their credit cards

that charge 15% APR

Page 16: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Debit vs. Credit Card

Debit Card - plastic card that is

electronically connected to an

account that holds cardholder’s money

Credit Card Debit Card

Connected to an account that holds

cardholder’s money

Money is immediately taken out of an account

Not connected to an account

Money is borrowed and paid

back later

1.6.1.G1

Page 17: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

How do you get a credit card?

1.

2.

Examine credit card offers

Complete an application

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Page 18: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Getting a Credit Card

Must be 21

If someone agrees to be a co-signer on an account, they are equally responsible for the loan

UNLESS

Show proof of sufficient income

Have a co-signer

1.6.1.G1

Page 19: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

• Convenient• Useful for emergencies• Often required to hold a

reservation• Purchase expensive items

earlier• Possibility of receiving

bonuses, such as frequent flyer miles and cash rebates

• Paying interest if balance is kept on card

• Additional fees may apply if card is not used properly

• Tempting to overspend• Responsible for lost/stolen

cards• Risk of identity theft

Advantages Disadvantages

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Page 20: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Do Don’t• Pay amount charged in full

every month• Pay payments on time• Keep track of charges by

keeping receipts• Check monthly credit card

statement for errors

• Make late payments• Pay only the minimum

payment due• Go over the credit limit• Charge items that can’t be

paid off within the month

1.6.1.G1

Page 21: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Irresponsible use of Credit Cards

Charged when minimum payment is not made by due date

Late Payment Fee

Over-the-Limit Fee

Penalty APR

• Charged if the amount of transactions goes over credit limit

• Higher interest rate charged on new transactions

1.6.1.G1

Page 22: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Purpose

Includes

Why is it important to examine a credit card statement?

• Summarizes important information from previous month

• Transactions made• Amount owed • Minimum payment• Payment due date (date minimum payment is due)

1.6.1.G1

Page 23: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Credit Card Safety Tips

It is important to keep credit cards and keep credit card information secure to avoid someone else making charges

If a credit card is closed, notify the company in writing and by phone, then cut up the card

Sign back of card with signature and “Please See

I.D.”

Never give out a card number unless making

purchases

Do not leave cards lying around

1.6.1.G1

Page 24: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Credit Card Safety Tips

Immediately reporting a lost or stolen credit card reduces the cardholder’s liability for any possible fraudulent purchases

Lost or stolen cards should be reported immediately to the

credit card company

Keep a list of all cards, account numbers, and

phone numbers separate from cards

Shred any credit card offers received

Check credit card statements for false

charges; report any false charges immediately

1.6.1.G1

Page 25: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Summary

What is a credit card?

How can you avoid paying interest on a credit card?

What is the difference between a credit card and a debit card?

• Plastic card that holds pre-approved credit • Used for the purchase of items now and payment of them later

• Pay the credit card balance in full every month!

• Debit card- money is taken from the cardholder’s account• Credit card- money is borrowed and paid back later

1.6.1.G1

Page 26: Take Charge of Credit Cards - Get the CCPS FACS!gettheccpsfacs.weebly.com/uploads/5/.../take_charge_of_credit_cards... · Funded by a grant from Take Charge America, Inc. to the Norton

1.6.1.G1

© Take Charge Today – November 2014 – Take Charge of Credit Cards – Slide ‹#›

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Remember….

If a credit card is used properly it can offer

many benefits

Keep your credit cards and credit card

information secure

Use a credit card responsibly! Only charge items when there is no doubt about ability to

pay off the charges

1.6.1.G1