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Unders tanding Your Credit Card Credit Unit tC ard Take Charge of Your FinancesCr edi
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Something to think AboutTwenty-one year old Jenny felt rich when she received her first credit card during her junior year of college. She charged $2,500, her credit limit, the first month. Every month after that, she was careful about paying on time, but only sent in the minimum monthly payment, $50.00. With an interest rate of 19.8%, even though she never charged another item, it will take her 8 years and 9 months to pay off her account. When her account has a zero balance, she will have paid a total of $5,325.18. Therefore, she will have paid $2,825.18 in interest.
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ard t C ard edi t CCr edi CreditCr CREDIT- When goods, services or money is received in exchange for a promise to pay a definite sum of money at a future date INTEREST The price of - money- when referring to credit, interest is the charge for borrowing money
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ard t C ard edi t CCr edi r Lender and BorrowerC LENDER- BORROWER- The person or organization The person or who has the resources to organization that is provide the individual with a receiving the money from loan the lender
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Cr edi t CCr edi ard t C ard Closed-end vs. Open-end Credit Open-end Characteristics Closed-end credit (revolving) credit Credit extended inDefinition A one-time loan advance May be used for a varietyPurpose of loan Specified in application of purposes
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Cr edi t CCr edi ard t C ard Closed-end vs. Open-end Credit Closed-end Characteristics Open-end credit credit Varies- can be paid in one Specified number of Payments payment or a series of equal payments equal or unequal payments Agreed upon during the May be increased for Loan Amount application process responsible consumers Mortgage, automobile, Examples Credit cards education loans
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ard t C ard edi t CCr edi Credit CardCr What is a credit card? Pre-approved credit which can be used for the purchase of goods and services now and payment of them later A credit cards credit limit varies based upon an individual’s perceived creditworthiness Credit limit is the Creditwor thiness is an maximum dollar individuals ability and willingness to pay the money back amount loaned
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ardCr ediCr t C ard edi t C Credit Card Interest Interest is charged each month the balance is not paid in full Rate at which interest is charged is referred to as: Annual Percentage Rate (APR) The cost of credit expressed as a yearly interest rate
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ard t C ard edi t CCr edi Minimum PaymentsCr • Required to make at least a minimum payment each month – Usually only a small percentage (2.5-5%) of the total balance due • Cardholders who only make the minimum payment: – Make slow progress paying off card balance – Pay substantially more than what was initially charged to the card
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ard t C ard edi t CCr edi Minimum PaymentsCr Amount Total charged to Time to Total Minimum amount credit card APR pay off the amount payment paid in in one credit card paid interest purchase $2,000 18% $50.00 62 months $1,077.25 $3,077.25 $500 12% $25.00 23 months $60.67 $560.67
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ard t C ard edi t CCr ediCr Advantages to using Credit Cards Advantages Convenient payment tool Protection against fraud Opportunity to establish a Useful for emergencies positive credit history Online shopping is safer than using a Often required to hold a reservation debit card because of the Fair Credit Billing Act protection Able to purchase “big ticket” items Possibility of receiving bonuses, such and spread out payments as frequent flyer miles or cash rebates
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ard t C ard edi t CCr ediCr Disadvantages to using Credit Cards Disadvantages Interest can be costly when Responsible for lost/stolen cards a balance is revolved Additional penalty fees Applying for multiple accounts can may apply lower your credit score Tempting to overspend Risk of identity theft
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ard t C ard edi t CCr edi Debit CardsCr • W hat is a debit card? – A plastic card which looks like a credit card, but is electronically connected to the cardholder’s bank account – Money is immediately withdrawn from the cardholders checking account What is the difference between a credit card and a debit card?
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ard t C ard edi t CCr edi Credit HistoryCr Credit cards can have a positive or negative impact on an individuals credit history Credit Report A record of a consumer’s credit history that includes information about credit card use as well as the use of other types of credit, such as auto loans, student loans and mortgage loans Credit Score A number that summarizes an individual’s credit record and history. It is a numeric “grade” of a consumer’s financial reliability
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ard Cr edi Cr t C ard edi t C Positive Credit Card use Helps develop Proper credit positive credit Earn a high history and credit card use credit score reportA high credit score gives the consumer the opportunity to have lower interest rates on loans, the privilege to use different forms of credit, and an easier approval process for future credit
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ardCr ediCr t C ard edi t C Positive Credit Card Use • Examples of positive credit card behaviors: – Paying credit card balances in full every month – Paying credit card bills on time – Applying for only credit cards that are needed – Keeping track of all charges by keeping receipts and using a check register – Checking the monthly credit card statement for errors
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ardCr ediCr t C ard edi t C Negative Credit Card Use Develops Improper negative credit Lower credit history and credit credit card use score report Consumers with low credit scores have difficulty getting loans, difficulty renting apartments, payhigher interest rates, pay higher insurance rates, and have difficulty obtaining a job
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ardCr ediCr t C ard edi t C Negative Credit Card use • Examples of negative credit card behaviors: – Making late credit card payments – Paying only the minimum payment – Exceeding the card’s credit limit (usually triggers a penalty fee) – Charging items that can’t be paid off immediately – Owning too many credit cards
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ard t C ard edi t CCr edi NO CreditCr • If an individual has not used credit, they will not have any information in their credit report • Not having a credit report can cause an individual to be denied credit
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ard t C ard edi t CCr edi Credit Card OffersCr Credit card issuers are required to disclose the terms and fees of credit cards in an easy to read box format This is called the Schumer box
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ar d tCCr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or Annual Percentage Rate 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. (APR) for Purchases H ow to Av oid Paying I nter est on Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. This section discloses the Pu rchases Minimum I nter est Charge If you are charged interest, the charge will be no less than $1.50. interest paid for purchases on For Credit Card Tips fr om the Feder al Res erv e To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcardthe card. Multiple interest rates Boar d Set -up and Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your may be listed here, because the Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 final interest rate may depend •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) on the creditworthiness of the Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) applicant • • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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Introductory Rate Interest Rates and Interest Charges If the credit card has an Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. introductory rate it will be AP R for Balance Trans fers 15.99% •This APR will vary with the market based on the Prime Rate shown in this section, which is AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% the APR charged during the When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; orcredit cards introductory period 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. after a credit card account is H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any opened. The card will have a Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases Minimum I nter est If you are charged interest, the charge will be no less than $1.50. different APR after the Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard introductory period ends Feder al Res erv e Boar d Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your What is the introductory rate for Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. this credit card offer? •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) The introductory rate depends •Addit ional Card Fee: $5 annually (if applicable) on the creditworthiness of the Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) applicant, but it will be • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • 12.99%, 13.99%, or 14.99% Penalt y Fees • Foreign Tr ans action: 2% of each transaction in U.S. dollars L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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Variable-rate APR Some cards will have a Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. variable-rate APR , which is Rate (AP R) for Pu rchases After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. an APR that may change AP R for Balance Trans fers 15.99% •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99%depending on other factors, such Adv ances Penalt y AP R and •This APR will vary with the market based on the Prime Rate 28.99% When it Applies This APR may be applied to your account if you: as the prime rate. The prime 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; orrate is an index that represents 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. the interest rate most banks H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month.charge their most credit-worthy Pu rchases Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge customers For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar dWhat is the APR for Purchases for Set -up and Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your this credit card offer? Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 14.99% •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) Is this a variable-rate APR Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) or a fixed-rate APR? • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars Variable-rate APR Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate.APR for Balance Transfers AP R for Balance 15.99% •This APR will vary with the market based on the Prime RateThis section discloses the interest Trans fers AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate paid for balance transfers , Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; which is the act of transferring 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of thesedebt from one credit card account reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. to another. Balance transfer fees H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases may apply, even if the balance Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website transfer APR is 0% Tips fr om the Feder al Res erv e Boar d of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are What is the APR for balance assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) transfers for this credit card offer? •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) 15.99% Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; APR for Cash Advances 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.This section discloses the interest H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any paid for cash advances, such as Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases Minimum I nter est If you are charged interest, the charge will be no less than $1.50.withdrawing cash from an ATM Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcardusing a credit card. Cash advance Feder al Res erv e Boar d Fees fees may also apply Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) What is the APR for cash advances Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is for this credit card offer? • greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater 21.99% Penalt y Fees • • Foreign Tr ans action: 2% of each transaction in U.S. dollars L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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Penalty APR and Annu al Per centage Interest Rates and Interest Charges 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. When it Applies Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate.This section discloses the penalty AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% •This APR will vary with the market based on the Prime RateAPR, as well as the penalty terms Adv ances Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; that trigger the penalty APR to 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. take effect H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any•Penalty APR is the interest Paying I nter est on Pu rchases Minimum I nter est interest on purchases if you pay your entire balance by the due date each month. If you are charged interest, the charge will be no less than $1.50.rate charged on new transactions Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcardif the penalty terms in the credit Feder al Res erv e Boar d Feescard contract are triggered Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) What is the Penalty APR for this Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) credit card offer? • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars 21.99% Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or How To Avoid Paying 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. Interest on Purchases H ow to Av oid Paying I nter est on Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.This section explains how you Pu rchases Minimum I nter est Charge If you are charged interest, the charge will be no less than $1.50.can avoid interest charges on a For Credit Card Tips fr om the Feder al Res erv e To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard credit card Boar d Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.How can a cardholder avoid paying •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) interest on a credit card? •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) By paying credit card bills Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is in full by the due date • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% Minimum Interest When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; Charge 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these Credit card companies often reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any have a minimum interest Paying I nter est on Pu rchases Minimum I nter est interest on purchases if you pay your entire balance by the due date each month. If you are charged interest, the charge will be no less than $1.50. amount. These charges Charge For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcardtypically range from $0.50 to Feder al Res erv e Boar d Fees $2 per month and are Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.disclosed in this section of the •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) credit card offer •Addit ional Card Fee: $5 annually (if applicable) Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollarsWhat is the minimum interest charge Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 for this credit card? • • Ov er- the- limit: $29 R etur ned Payment: $35 $1.50 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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ar d tCCr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or For Credit Card Tips 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.from the Federal Reserve H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Board Pu rchases Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge This section directs For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e consumers to the Federal Boar d Fees Reserve website to obtain Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20more information about credit •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) cards Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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Set-up and Maintenance Fees Annu al Per centage Rate (AP R) for Interest Rates and Interest Charges 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the marketThis section discloses any set- Pu rchases AP R for Balance based on the Prime Rate. 15.99% up and maintenance fees for Trans fers AP R for Cash Adv ances •This APR will vary with the market based on the Prime Rate 21.99% •This APR will vary with the market based on the Prime Rate the card, which can include Penalt y AP R and When it Applies 28.99% This APR may be applied to your account if you: 1.Make a late payment; annual fees, account set-up 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. fees, participation fees, and H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. additional card fees H ow to Av oid Paying I nter est on Pu rchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge•Annual fee is a yearly fee For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv ethat may be charged for Boar d Feeshaving a credit card Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) What is the annual fee Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is for this credit card? • greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars $20 Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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ar d tCCr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% Transcation Fees When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or This section discloses any 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.transaction fees for the card, H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any which can include balance Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases Minimum I nter est If you are charged interest, the charge will be no less than $1.50. transfer fees, cash advance Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcardfees, and foreign transaction Feder al Res erv e Boar d Fees fees Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 What is the fee for cash •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) advances for this card? Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is $5 or 3% of the • greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is amount of each cash • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is advance (whichever is • more than $1000 Ov er- the- limit: $29 greater) • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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Penalty Fees This section discloses the Annu al Per centage Interest Rates and Interest Charges 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. penalty fees for the card, Rate (AP R) for Pu rchases After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. which can include late- AP R for Balance Trans fers AP R for Cash 15.99% •This APR will vary with the market based on the Prime Rate 21.99% payment, over-the-limit, and Adv ances Penalt y AP R and When it Applies •This APR will vary with the market based on the Prime Rate 28.99% This APR may be applied to your account if you: returned payment fees 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us.•Late payment fee is H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.charged when a cardholder H ow to Av oid Paying I nter est on Pu rchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.does not make the minimum Minimum I nter est Charge For Credit Card If you are charged interest, the charge will be no less than $1.50. To learn more about factors to consider when applying for or using a credit card, visit the websitemonthly payment by the due Tips fr om the Feder al Res erv e Boar d of the Federal Reserve Board at http://www.federalreserve.gov/creditcarddate Set -up and Maintenance Fees Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are•Over-the-limit fee is assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee)charged if the account balance •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable)goes over the set credit limit Trans action Fees • • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is Does this card have an • more than $1000 Ov er- the- limit: $29 • R etur ned Payment: $35 over-the limit fee? * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 Yes, the over-the-limit fee is days late in paying your bill
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ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% How we calculate your When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or balance 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.Credit card companies can use H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any one of several methods to Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases Minimum I nter est If you are charged interest, the charge will be no less than $1.50. calculate the outstanding Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcardbalance on a credit card. The Feder al Res erv e Boar d Fees method used is disclosed in Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. this section •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)What method is used to calculate the • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars balance on this card? Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Average daily balance • • Ov er- the- limit: $29 R etur ned Payment: $35 (including new purchases) * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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Interest Rates and Interest Charges Loss of Introductory Annu al Per centage Rate (AP R) for Pu rchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR AP R for Balance Trans fers 15.99% •This APR will vary with the market based on the Prime RateIf the card has an introductory AP R for Cash Adv ances Penalt y AP R and 21.99% •This APR will vary with the market based on the Prime Rate 28.99%rate, this area will list how the When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit;lower introductory rate can be 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. lost H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases How can the introductory APR be Minimum I nter est Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website lost on this card? Tips fr om the Feder al Res erv e of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Boar d If the cardholder is more Set -up and Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your than 60 days late in paying Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 the bill •Account Set -up F ee: $20 (one-time fee) What APR will the cardholder •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) be charged if the introductory Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) rate is lost? • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars The Penalty APR of Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 28.99% • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
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ard t C ard edi t CCr edi r Credit Card BenefitsC • Research benefits that may be received from the card – Cash rebates – Warranties for items purchased with the card – Travel accident insurance – Frequent flyer miles • Make sure to know all terms and conditions of card benefits • Cards that offer benefits may charge fees or higher interest rates
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ardCr ediCr t C ard edi t C Receiving a Credit Card 1. Compare credit card offers and determine which card to apply for 2. Complete a credit application – A form requesting information about a person’s ability to repay and the applicant’s age – Can be completed through the mail, the internet or over the phone
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ardCr ediCr t C ard edi t C Receiving a Credit Card 3. Lenders conduct a credit investigation – A comparison of information on credit application to information on a credit report 4. Applicants may or may not be approved for the card they apply for – Approval depends on the applicants credit history
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ardCr ediCr t C ard edi t C Pre-Approved Credit Card Applications • Credit card companies send pre-approved credit card applications in the mail – If an individual is pre-approved for that particular card, they have passed the initial credit check Let’s do some comparison shopping…
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ardCr ediCr t C ard edi t C Credit Card Statements • Credit card statements outline important information about the card • The 2009 CARD Act required credit card companies to include specific information about a card account in the statement Andrew’s Credit Card Statement Please help Andrew interpret his credit card statement.
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