1 / 13

USE CREDIT WISELY

USE CREDIT WISELY. Consumer Action created this project in partnership with. Advantages of Credit. What can credit do for you? Help you through a financial emergency Enable you to pay for a purchase over time Provide a short, interest-free loan Enable you to rent a car, hotel room, etc.

muniya
Télécharger la présentation

USE CREDIT WISELY

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. USE CREDIT WISELY Consumer Action created this project in partnership with

  2. Advantages of Credit • What can credit do for you? • Help you through a financial emergency • Enable you to pay for a purchase over time • Provide a short, interest-free loan • Enable you to rent a car, hotel room, etc. • Offer convenience, security when shopping • Rebates or rewards • Allow you to avoid carrying cash • Allow you establish credit/build good credit

  3. Types of Credit Installment Credit • Fixed number of monthly payments • Car loans, mortgages Revolving Credit • Short-term, open-ended • Assigned credit limit • Available credit fluctuates as you make purchases & payments • Option to make full or partial payment • HELOCs, credit cards

  4. Card Types Credit, charge & debit cards • Visa, MasterCard, Discover • Affinity cards • Rewards cards • Secured cards • Retail and gas cards • Stored value (prepaid) cards • Charge cards • Debit cards

  5. Credit Card Terms • Credit limit • Method of computing the balance • Minimum payment • Payment due date • Grace period • Interest rate • Fees

  6. Credit Card Terms: Interest • The lender’s fee for allowing you to use its money • Expressed as a percentage of the credit • Fixed vs variable interest rate • Annual percentage rate (APR) • Periodic interest rate • Different rates for a single card: • Teaser • Cash advance • Purchase • Penalty/Default • Balance transfer • Effective interest

  7. Credit Card Fees • Application fee • Annual fee • Balance transfer fee • Cash advance fee • Currency conversion fee • Late fee • Overlimit fee • Bounced check/returned item fee • Miscellaneous fees

  8. Activity: Credit Card Jeopardy • Break into three groups • Choose one person on your team to “buzz” in when you think you have the correct “question” to the answer • A correct answer earns the point. An incorrect answer loses a point and allows another team to “steal” the point. • Remember to phrase your answer in the form of a question.

  9. Credit Card Billing Statements • Opening/closing date • Past due amount • New balance • Minimum payment due • Due date • Account summary • Transactions • Rewards information • Explanation of finance charges • Effective APR

  10. Food for Thought • In 2007, credit card customers who revolved their debt (didn’t pay the balance in full each month) paid $18.1 billion in penalty fees to credit card companies. Source: “Don’t Get Clobbered By Credit Cards,” by Gary Weiss

  11. Comparing Credit Cards • Credit limit • Purchase APR • Balance transfer APR • Cash advance APR • Promotional APRs • Penalty APR • Variable-rate info • Grace period • Annual fee • Transaction fees • Penalty fees • Balance computation method • Minimum finance charge • Rewards

  12. Obtaining Credit • Pre-approved offers • Invitations to apply • Instant credit • Consumer-initiated application • Banks, credit unions, retailers, card companies, and other institutions • Compare offerings, terms • www.consumer-action.org • www.bankrate.com • www.cardtrak.com • www.cardratings.com

  13. Using Credit Wisely • Know your credit limit and don’t exceed it • Charge only as much as you can repay • Pay more than the minimum, if possible • Pay by your due date (and time!) • Use a debit card, not a credit card, to get cash • Don’t accumulate too much debt • Avoid penalty fees and rates • Consider optional fee-based services carefully • Contact a credit counselor (www.nfcc.org or www.aiccca.org)

More Related