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Credit Cards
 

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/