Workshop led by Erin Cusack & Kaycie Hebert

Financial Literacy 101: Understanding Credit

This workshop series is designed to help you:

Learn the basics of financial literacy

Create a financial plan Reduce your stress Make the most of your student

experience Manage your finances and debt Improve your health and wellness Share and learn financial tips

•Ever feel stressed about money•Have ever ordered a credit report•Have ever created a budget•Have ever created a budget and not followed it•Want to learn how to improve and manage your financial wellness

Stand up if you…

How Credit Card Savvy Are You?

Answer True or False to the Following Statements…

All credit cards have the same grace period.

False – Interest free periods vary from card to card. They can range from 15 days to 60 days. Check your credit card agreement to find out what grace period you have.

If you take a “cash advance” on your credit card, you don’t have to pay

interest on it as long as you pay your credit card bill in full by the due date.

False - Cash advances are treated differently than purchases made with a credit card. With a cash advance, you are charged interest from the day you get the cash advance until the day you pay it off in full.

If you are unhappy with your credit card payment due date, you can phone and request that

it be changed.

True-Most credit card companies will happily change your regular monthly due date if you call to request it.

You don’t have to pay off your credit card in full every month in order to maintain a good credit

rating.

True- While it’s best to pay your bill off in full each month, paying the minimum by the due date will keep your credit in good standing.

You can phone your credit card company and request a lower

interest rate.

True- While there’s no guarantee that your interest rate will be lowered, some companies will offer a lower rate if you request it. It’s worth asking!

A balance of $5000 with 18.9% interest will take 15 years to pay off by paying

the minimum monthly payments.

False- It would take 28 years with a total borrowing cost of $13, 068.42!!! However, repaid at $325 per month would take 18 months with an extra $771 in interest!

Don’t Get Trapped!

Visit www.themoneybelt.gc.ca to compare bank accounts, credit cards, test your financial knowledge & increase your financial skills!

Here’s a quick credit check…

What is credit?

*Credit Counselling Society

Credit is the purchase of goods or services in the present with a promise to pay in the future, with money you still plan to earn*.

What types of things show on a credit report??

•Cell phones on contract•Hydro bill•Credit cards•Bank loans and lines of credit•Parking tickets•Unpaid student loans•Car loans/home loans (mortgage)

What is a credit report?

A credit report is a summary of how you pay your financial obligations.

What is a credit rating?

Credit Rating is an evaluation of the likelihood of a borrower to default on a loan.

Where can I get my credit report?

There are two main credit bureau companies in Canada, Equifax and TransUnion.

Each will send you a copy for free once a year if you request one by mail or phone.

www.equifax.cawww.tuc.ca

Why should I check my credit report?

To make sure it’s accurate. If there are any mistakes on it, you are able to correct them.

Did you know? Those most vulnerable to identity theft are those who have good credit and rarely check their record.

How long do things stay on my credit report?

Good and bad, everything stays on your credit report for 6 to 7 years.

Tips for Good Credit and Financial Health

•Make payments on time•Keep credit limits reasonable•Pay more than the minimum whenever you can•Check your credit report once a year•Start a savings, even if it’s only a little bit•Only apply for credit that you need•Use cash instead of plastic

What can I do if I have unmanageable debt?

Contact a free a debt solution agency for help,such as:

The Credit Counselling Society of BCwww.NoMoreDebts.org

1-877-527-8999

What is your best money saving or debt-reducing tip?

Take a moment to share with one or two people.

Your mission, if you choose to accept it…

Order your free credit report and review it

List all of your credit cards and current debt

Set three goals for improving your current credit rating or financial situation

Bonus Challenge! For the next two weeks, use only cash to make purchases! (It’s much easier to overspend with plastic!)