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  • 1.  
  • 2. The ABCs of Credit Card Finance Essential Facts for Students 2007 Carol A. Carolan, Ph.D.
  • 3. Essential Facts … Two Groups of Information <ul><li>Credit Card Costs </li></ul><ul><li>Credit Card Behaviors </li></ul>2
  • 4. Credit Card Costs 3
  • 5. <ul><li>Annual Fees </li></ul><ul><li>Interest </li></ul><ul><ul><ul><li>Annual Percentage Rate (APR) </li></ul></ul></ul><ul><li>Average Daily Balance Method </li></ul><ul><li>Cash Advances </li></ul><ul><li>Convenience Checks </li></ul><ul><li>Default Rates </li></ul>4
  • 6. <ul><li>Low Interest Introductory Rates </li></ul><ul><li>Balance Transfers </li></ul><ul><li>Late Fees </li></ul><ul><li>Over Credit Limit Fees </li></ul><ul><li>Bounced Check Fees </li></ul><ul><li>Currency Conversion Fees </li></ul>5
  • 7. Choosing a Credit Card 6
  • 8. Look For: <ul><li>A Low Annual Percentage Rate (APR) </li></ul><ul><li>No Annual Fee </li></ul><ul><li>A Long Grace Period </li></ul><ul><li>Average Daily Balance Method </li></ul><ul><li>Low Penalty Rates </li></ul>7
  • 9. Types of Credit Card Users <ul><li>Convenience Users </li></ul><ul><li>“ Revolvers” </li></ul>8
  • 10. Dos and Don’ts 9
  • 11. <ul><li>One Card </li></ul><ul><li>Student Loans for Tuition </li></ul><ul><li>Wants vs. Needs </li></ul><ul><li>Convenience </li></ul><ul><li>Pay More Than the MMP </li></ul><ul><li>Be a Manager </li></ul>10
  • 12. <ul><li>Don’t Skip Payments </li></ul><ul><li>Pay on Time </li></ul><ul><li>Don’t Exceed Your Credit Limit </li></ul><ul><li>Cash Advances </li></ul><ul><li>Convenience Checks </li></ul><ul><li>Be Wary of Teaser Rates </li></ul>11
  • 13. <ul><li>Credit Card Shuffle </li></ul><ul><li>Low Credit Limit </li></ul><ul><li>Quickly Mail Payments </li></ul><ul><li>Save Receipts </li></ul><ul><li>Change of Address </li></ul><ul><li>Lost and Stolen Cards </li></ul>12
  • 14. There’s Always a Solution 13
  • 15. Getting Out of Debt <ul><li>Don’t Deny the Problem </li></ul><ul><li>Stop Using Your Card </li></ul><ul><li>Contact Your Credit Card Issuer </li></ul><ul><li>Get a Job </li></ul><ul><li>Reduce Expenses </li></ul><ul><li>Talk about Your Problems </li></ul><ul><li>Debt Consolidation </li></ul>14
  • 16. Credit Reports & Credit Scores 15
  • 17. Credit Report <ul><li>Collection of Information </li></ul><ul><li>Financial Report Card </li></ul><ul><li>Lenders Use this Information </li></ul><ul><li>3 Main Credit Reporting Agencies </li></ul><ul><li>Regularly Review Your Credit Reports </li></ul>16
  • 18. Credit Score <ul><li>Numeric Value Applied to a Credit Report </li></ul><ul><li>Usually Called a FICO Score </li></ul><ul><li>Higher is Better </li></ul>17
  • 19. What Goes Into Our Credit Scores? <ul><li>Pay Bills on Time </li></ul><ul><li>Unresolved Debt </li></ul><ul><li>Number of Cards and Their Balances </li></ul><ul><li>How Long </li></ul><ul><li>Quest for New Credit </li></ul>18
  • 20. Consequences of Irresponsible Credit Card Use 19
  • 21. <ul><li>High Interest Rates </li></ul><ul><li>Difficulty Renting an Apartment </li></ul><ul><li>Denied Employment </li></ul><ul><li>Graduate School Rejection </li></ul><ul><li>Higher Insurance Premiums </li></ul><ul><li>Big Bucks for Cell Phones </li></ul><ul><li>Denial of Credit </li></ul>20
  • 22. Identity Theft 21
  • 23. Signs of Identity Theft <ul><li>Card/Statement Not Requested </li></ul><ul><li>Statement Not Received </li></ul><ul><li>Unauthorized Charges </li></ul><ul><li>Denied Credit </li></ul><ul><li>Debt Collectors </li></ul>22
  • 24. Minimize the Risk… <ul><li>Keep Personal Information Personal </li></ul><ul><li>Don’t Use Social Security Number </li></ul><ul><li>Leave Social Security Card Home </li></ul><ul><li>Carry Only What’s Needed </li></ul><ul><li>Photo ID Credit Card </li></ul><ul><li>Know Your Billing Cycles </li></ul>23
  • 25. <ul><li>Shred Receipts </li></ul><ul><li>Use the Post Office </li></ul><ul><li>Creative Passwords </li></ul><ul><li>Purchase on Secure Websites </li></ul><ul><li>Keep Personal Information Safe </li></ul><ul><li>Review Credit Reports </li></ul><ul><li>Computer Virus Protection </li></ul>24
  • 26. Victims of Identity Theft Should… <ul><li>Contact the Big Three </li></ul><ul><li>Fraud Alert </li></ul><ul><li>Order Free Credit Reports & Review </li></ul><ul><li>Call Fraud Departments </li></ul><ul><li>Close Fraudulent Accounts </li></ul><ul><li>File a Police Report </li></ul><ul><li>Contact the FTC </li></ul>25
  • 27.  

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