Credit Card Jacob Jackson, Alivia Overmyer, Jordan Roethlisberger
History of Credit Card • The use of credit cards began in the U.S. in the 1920’s, but it had originated in 1890’s Europe • Early credit cards were made for the customer and direct company. • Later around 1938, credit cards issued by specific companies began to be accepted by different companies (third parties) • Presently, credit cards are accepted by multiple third parties (not just a select few)
History of Credit Cards (Cont’d) • Credit cards were not always plastic. In their history they were credit tokens made from metal coins, metal plates, celluloid, metal, fiber, and even paper • The inventor of the first bank credit card was John Biggins of the Flatbush National Bank of Brooklyn in New York, 1946. This was the “Charge-It” program.
Advantages of using credit cards • Allows you to enjoy goods now. • Perhaps when your funds are low. • Can shop online, make hotel reservations, etc. • Shopping and traveling without carrying cash. • Others will view you as a responsible person.
Disadvantages of using credit cards • Credit cost money • Temptation to buy more than you can afford. • Buying more you can afford can cause trouble. • Fail to repay a loan, you can lose your good credit reputation. • If your income does not increase, you may have troubles paying bills.
Smart/Appropriate uses of credit cards • Only use a credit card if you know you can pay back the amount you borrow • Use credit cards only if you know that you need what you’re buying • Use credit cards for purchases that can earn you points, or rewards for what you purchase • Buy gas, pay at restaurants, and make reservations using your credit card • Purchase groceries, gas, and food using a credit card to help build good credit
Not smart/Inappropriate uses of credit cards • Don’t buy frivolously using credit cards • Avoid letting an overdue balance carry over • Don’t exceed your limit • Don’t have multiple cards, only apply if you need it • Avoid paying only the minimum payment
Media’s Role in Credit Cards • The media tries to use people’s input in their commercials • They talk about other credit cards or why they like one • The media tries to relate in some way to the general public to get you to say “I need that” • Something that really gets the attention of the public is the cash rewards and other goodies • Receive cash and special deals on food, gas, etc. if you use the card.
Media’s Role... (Cont’d) • They advertise what you can buy with the card and not money • Fancy luxuries in commercials are what everyone dreams of • MasterCard - Justin Timberlake, Peyton Manning • Visa - Morgan Freeman • American Express - Jerry Seinfeld, Karl Malden, Ellen DeGeneres, Tina Fey, Conan O’Brien and Tiger Woods • Capital One - Alec Baldwin and Jimmy Fallon
Advertisements https://www.youtube.com/watch?v=jUJhgu3A5Rw https://www.youtube.com/watch?v=-rVE7haSLmE https://www.youtube.com/watch?v=QV5V1B6gpq0
Use of Credit Cards by Students (college) • Use of credit cards builds credit score • The earlier you use credit (high school/college) the better • After college • Credit score is used for renting, loans, mortgages, and even jobs • College students use credit for rewards • Gas and cash back on supplies purchases to make things slightly easier
Using Credit Wisely-Tips, Hints, What to do or Not to do • Borrow cheaply • In the event that you cannot make the payment on time, it will be less debt risk • Always pay on time • Keeping up with payments reduces finance charges (Also builds a higher credit score) • Use the offers that credit cards allow to your advantage • Make big payments on huge borrowed amounts before the interest kicks in • Interest not building does not mean do not pay
Using Credit Wisely… (Cont’d) • If you may be unable to make a payment, let your creditor know in advance • Creditors may be lenient on their fees if informed • Stay within 30% of your credit limit • Much of your credit score is determined by how much debt you have • Build up your rewards, but watch out for strings attached • With rewards you can receive travel miles, movie passes, gas discounts, and even money
Using Credit Wisely... (Cont’d) • Float - Purchase something expensive and pay it in full when the bill is due • Find out when the billing cycle ends and make your purchase right after that date • The bill should not show up until the next billing • You could save up to two months interest free • Does NOT work if you already have a carrying balance • Do not make minimum payments on debt, pay what you can • Creditors put you into debt longer and the overall interest increases
Using Credit Wisely... (Cont’d) • Do not use your credit card for everyday purchases • This can be easier to pay with, but quickly leads to debt • Do not apply for a credit card without first reading the terms • Look at the fees, interest rates, and rewards • Do not buy things you cannot afford with a credit card • This is the fastest way to go into debt • Do not close credit cards without knowing the impact • Avoid closing cards that have a balance or that make up the majority of your credit history
Bibliography/Sources Works Cited "10 Dos and Don'ts of Using Your Credit Card." About.com Credit / Debt Management. N.p., n.d. Web. 16 Apr. 2014. <http://credit.about.com/od/creditcardbasics/a/dosandonts.htm>. "Advertising." Discover Card Campaigns. N.p., n.d. Web. 16 Apr. 2014. <https://www.discover.com/company/our-company/advertising/>. Bellis, Mary. "Who Invented Credit Cards - The History of Credit Cards." About.com Inventors. About.com, 05 Mar. 2014. Web. 16 Apr. 2014. <http://inventors.about.com/od/cstartinventions/a/credit_cards.htm>.
Bibliography/Sources Works Cited "Be Smart with Your Credit Card: Tips to Help You Use Your Credit Card Wisely." Financial Consumer Agency of Canada. N.p., n.d. Web. 17 Apr. 2014. <http://www.fcac-acfc.gc.ca/eng/resources/publications/creditCards/Pages/BeSmartw-Utilisez.aspx>. Detweiler, Gerri. "Credit Cards for People with Excellent Credit – Available at Credit.com." Credit.com. N.p., n.d. Web. 16 Apr. 2014. <http://www.credit.com/credit-cards/six-smart-credit-card-strategies/>. PBS. PBS, n.d. Web. 16 Apr. 2014. <http://www.pbs.org/wgbh/pages/frontline/shows/credit/more/rise.html>. "Vaughan's First Credit Card." The Top Shelf. N.p., n.d. Web. 16 Apr. 2014. <http://utsalibrariestopshelf.wordpress.com/2009/08/10/vaughans-first-credit-card/>.
Bibliography/Sources Works Cited "The Good, the Bad, and the Ugly of Credit Cards." Home Page. Consumer Jungle, n.d. Web. 21 Apr. 2014. "The 5 Biggest Dos and Don'ts of Using Credit Cards." About.com Credit / Debt Management. N.p., n.d. Web. 22 Apr. 2014.