Credit Cards
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Credit Cards

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Credit Cards Credit Cards Presentation Transcript

  • “A person’s credit report is one of the most important tools consumers can use to maintain their financial security and credit rating, but for so long many did not know how to obtain one, or what to do with the information it provided.”
    -Ruben Hinojosa
    Making money sensetips and ideas to help your family prosper
    Understanding Credit
  • What is Credit?
    Money you borrow and plan to repay.
    In most cases, there is a charge for borrowing the money (fees or interest).
    Questions to ask before you use credit for a purchase
    Why am I buying?
    Is it a need or a want?
    How am I going to pay for it?
    Rate affordability, how much is it really going to cost?
    Monthly payments, will it fit into my budget?
    Could I pay in cash or with other resources?
    How long is it going to take to pay back?
    What is the plan to pay the credit card bill?
    1
    Source: www.practicalmoneyskills.com
  • Advantages and Disadvantages of credit
    2
  • Most Common Types of Credit
    Revolving: allows you to borrow money at any time up to a set limit. (Credit Card & Home Equity Line of Credit)
    Installment: allows you to borrow a specific amount of money at one time for a defined purpose. (Car, Boat, Motorcycle, Student, or Personal loan)
    Non-Installment or service: allows you to pay for a used service at a later date. (Furniture stores, Utility companies, & Doctor bills)
    3
  • Your Responsibilities and Rights
    What is your responsibility when it comes to using credit?
    Pay it back
    Not to run up more debt than what you can comfortably pay back
    Understand your credit card terms
    Your Rights:
    Truth in Lending Act
    Fair Credit Reporting Act
    Equal Opportunity Act
    Fair Credit Billing Act
    Fair Debt Collection Practices Act
    4
  • Your Rights…..Continued
    5
  • Your Rights…….Continued
    6
  • How Much Can You Afford
    20-10 Rule
    7
  • Credit Scores Often Misunderstood
    66.5% of Americans don’t know or responded incorrectly when asked to define a good credit score, which is correctly defined as a score of 700 or higher.
    54% incorrectly believed that age is a factor in determining credit scores.
    52% do not regularly review their credit report.
    23% have never done so.
    8
    Source: www.thriventffc.com
  • Understanding Your Credit Report
    What is a Credit Report
    A document containing detailed information on a person’s credit history, including identifying information, credit accounts and loans, bankruptcies and late payments, and recent inquiries. It can be obtained by prospective lenders with the borrower’s permission, to determine his or her credit worthiness.
    Credit Reports include four types of information:
    Identifying Information
    Social Security Number
    Date of Birth
    Phone Number
    Current and Previous Addresses
    Credit Information
    Who they owe
    What they owe, installment, revolving payments
    Public Record Information
    Judgments
    Bankruptcies (10 years)
    Medical Collections
    Libraries
    Inquires
    Promotional or uninvited inquires
    Pre-Approval from company promotions
    Credit Inquires
    9
    Source: http://www.investorwords.com/5490/credit_report.html
  • What Makes Up A Credit Score
    10
  • How Can I Get My Credit Report/Score
    11
    www.annualcreditreport.com (One free per year)
    Three Credit Bureaus:
    Equifax (www.equifax.com)
    P.O. Box 105873
    Atlanta, GA 30348
    Trans Union Corporation (www.transunion.com)
    P.O. Box 390, Springfield, PA 19064-03901
    Experian (www.experian.com)
    P.O. Box 2350, Chatsworth, CA 91313-2350
  • Why Your Credit Score Might Be Low & How To Improve It
    12
  • Steps to Correct Credit Report Errors
    Get a copy of your credit report!
    Go to http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm
    for a sample dispute letter.
    13
  • Types Of Credit Cards
    14
  • Points To Consider When Shopping For A Credit Card
    Interest Rate – locked, variable, introductory
    Annual Fees
    Grace Period
    Late Fees
    Percent of payment you owe – minimum payment
    How do you plan to use card
    Rewards
    Service
    Payments locally or online
    Where is it accepted
    Foreign transaction rate
    Cash advance features
    Balance transfers
    Credit limit
    15
  • Reducing Credit Card Debt-
    Power Pay
    “How can I get rid of my credit card debt?”
    • Stop making new charges.
    • Gather all your credit card bills together.
    • Write down the total balance, the minimum payment required and the interest rate.
    Log on to: https://powerpay.org/index.php
    • Select the state of Wisconsin
    • Click on New? Sign up now
    • Click on PowerPay tab
    • Click on Payment calendar
    • Prioritize repayments – do you want to pay:
    • Highest interest first (greatest savings method)
    • Lowest balance first
    • Shortest term first
    16
  • Helpful Websites
    • www.optoutprescree.com – removes your name from the
    pre-screening lists at the three major credit bureaus for five years.
    • https://powerpay.org/index.php - computer program that calculates how to save the most interest and time to pay off debt.
    • http://www.bankrate.com/brm/calc/MinPayment.asp - true cost of paying only the minimum payment.
    • http://www.bankrate.com/brm/calc/creditcardpay.asp?protype-cc – calculates how long it will take you to pay off your credit card with a certain payment amount each month or number of months until you want to have it paid off.
    • www.cardtrak.com – search different card options, featured cards and look through a credit card dictionary.
    18
  • For more information:
    920.882.4800
    www.myprospera.com
    For more great financial tips and news follow us on Twitter and facebook!
    http://twitter.com/MyProspera
    http://facebook.com/