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Credit Cards.ppt

Credit Cards.ppt






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    Credit Cards.ppt Credit Cards.ppt Presentation Transcript

    • Credit Cards (pitfalls & proper use) Proverbs 22:7 “ The rich ruleth over the poor, and the borrower is servant to the lender”
    • Pay Off Your Charge Cards
      • No Where Can WE Earn 18 to 23 %
      • Minimum Payments Can Take Up to 30 Years
      • Take Money From All Sources to Pay
      • Cut-Em Up!!!
    • Proper Use of Credit Cards
      • Pay them off every month!!!!!!!!!
        • Do not carry a balance – ever.
        • Interest / fees / finance charges are a waste of money
      • Positives
        • Establish a positive credit history
        • Access to more money than you can carry safely
        • Some tickets, hotel rooms, rental cars require them
        • Extra warranties, protection from theft or damage
          • Insurance for rental cars at no extra charge
        • Points / discounts / rebates with some cards
        • Stop payments are possible with credit cards
    • Pitfalls of Credit Card Use (Be aware of these if you use them)
      • You may be tempted to spend more with credit cards
      • You pay finance charges or interest if you don’t pay off
      • Debt can be compounded by finance charges, raised interest rates, and other fees if a payment is missed
      • Problems can show up on you credit report
        • effects your credit history & you will pay higher interest rates
      • Cash advances carry fees and immediate interest charges
        • Rates are higher & there is no grace period for cash advances.
      • Cards with incentives (airline miles, etc.) often place restrictions that make them hard to redeem
      • Many charge an annual fee (whether or not you use them)
    • QUIZ Time!! Try to answer the following questions, and keep track of how many you get correct.
    • Credit Card Quiz Question #1
      • How many credit cards does the average American family have?
        • 6
        • 8
        • 11
        • The average American family has 8 credit cards.
    • Credit Card Quiz Question #2
      • Nearly 144 million Americans have general purpose credit cards. Approximately how many of them pay off their bill in full each month?
        • 55 million
        • 90 million
        • 115 million
        • 55 million Americans pay off their credit card bills in full each month.
    • Credit Card Quiz Question #3
      • Approximately how many Americans pay only the minimum payment required each month?
        • 15 million
        • 35 million
        • 50 million
        • 35 million Americans pay only the minimum payment required each month.
    • Credit Card Quiz Question #4
      • The credit card industry jargon for someone who pays his or her bill in full every month is:
        • a deadbeat
        • a revolver
        • a gamer
        • Those who pay their bills in full every month are referred to as “deadbeats”.
    • Credit Card Quiz Question #5
      • The credit card debt that the average American family carries is approximately:
        • $2,500
        • $8,000
        • $13,000
        • The average American family has credit card debt of roughly $8,000.
    • Credit Card Quiz Question #6
      • How much notice must a credit card company give its customers when changing the terms of the cardholder contract?
        • 60 days
        • 30 days
        • 15 days
        • They may change the terms of the contract with only 15 days notice.
    • Credit Card Quiz Question #7
      • Which of the following is likely to trigger the universal default clause in a cardholder’s contract (meaning that the card issuer can raise the APR automatically)?
        • You went over your credit limit on another card.
        • You failed to make a payment to another creditor.
        • You applied for and received a loan.
        • ALL OF THE ABOVE !!!!!
    • Credit Card Quiz Question #8
      • Who regulates the national banks which issue most of the credit cards in the U.S.?
        • The Office of the Comptroller of the Currency
        • The Better Business Bureau
        • The attorney general in each state.
        • The OCC – part of the U.S. Treasury Department
    • Credit Card Quiz Question #9
      • If a person’s credit card is stolen – or the number is stolen – and it is used to charge purchases, the cardholder is obligated to:
        • Pay the credit card issuer $50 maximum
        • Pay 5% of the purchases charged by the thief
        • Pay the entire amount charged by the thief if the cardholder doesn’t notify the credit card company within 3 days of the theft.
        • You are only obligated to pay up to $50 for charges made to your card by a thief.
    • Credit Card Quiz Question #10
      • What does a high FICO score indicate?
        • The individual is likely to pay their bills.
        • The individual is more likely to carry debt.
        • The individual is likely to cancel his credit card and seek a better deal.
        • Your FICO score is your credit rating. A high rating means you are likely to pay your bills.
    • Credit Card Quiz Question #11
      • Why are there no legal limits on the amount of interest and fees that banks can charge for a credit card?
        • Some states allow higher interest and fees than others.
        • Two U.S. Supreme Court decisions permit banks to charge what the market will bear.
        • State usury laws permit them to do so.
        • Two U.S. Supreme Court decisions have allowed for it.
    • Grade Your Own Quiz
      • 9 to 11 right – You probably have your FICO score memorized. You’re a pro!
      • 6 to 9 right – You clearly know your way around a credit card statement.
      • 3 to 6 right – You need a crash course in personal finance. Good news…we have a Sunday School Class just for you.
      • 0 to 3 right – You should dispose of your credit card(s) and use cash for the foreseeable future.
    • Know Your Credit History
      • You are entitled to a free copy of your credit report once per year!
      • www.annualcreditreport.com
        • Choose any of the 3 credit agencies (TransUnion, Experian, Equifax)
      • Telephone: 1-877-322-8228
      • Hearing Impaired TDD: 1-877-730-4104
      • Get errors corrected!