Take charge of credit cards power point presentation 2.4.1.g1

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  • 1. 2.4.1.G1Take Charge ofCredit Cards“Get Ready toTake Charge of Your Finances” IntroductoryLevel
  • 2. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 2Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaWhat is Credit?Gives borrowercredit if theybelieve moneywill be paidbackPays backmoney PLUSinterest tolenderReceives goods,services, ormoneyRequestscredit fromlenderCredit- something is received in exchange for apromise to pay back money in the future
  • 3. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 3Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaWhat is Interest?Interest is the price of moneyWhen referring to credit,interest is the charge forborrowing moneyWhen referring to credit,interest is the charge forborrowing money
  • 4. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 4Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaWhat is a CreditCard?Plastic card that holds pre-approved creditCredit Limit- maximum amount ofmoney that can be charged on the cardPurchase items now Pay later
  • 5. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 5Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaCredit CardPaymentsMinimum Payment- minimumamount of a credit card bill thatmust be paid every monthPay total amountowed ORMake smallerpayments- equalor unequalWhat do you think is the best payment option?What do you think is the best payment option?
  • 6. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 6Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaCredit CardInterestCharged Each month the amount of money owed isnot paid in fullKnownasAnnual percentage rate (APR)-interest rate charged on a credit cardThe lower the APR thebetter for cardholder!The lower the APR thebetter for cardholder!10%APR 15%APR
  • 7. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 7Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaWhat if only the minimumpayment is made everymonth?Melissa and Skylar each purchased a plane ticket for$500 using their credit cards that charge 15% APRMelissa- Skylar-Payment Paid the fullamountowed- $500Paid the minimum paymentdue- $20Time to pay off credit card 1 month 3 yearsTotal amount of interestpaid$0 $104Total amount paid $500 $604If a credit card is paid in full every month, nointerest is paid!If a credit card is paid in full every month, nointerest is paid!
  • 8. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 8Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaWhat is the differencebetween credit cards anddebit cards?Debit Card - plasticcard that is electronicallyconnected to an accountthat holds cardholder’smoney
  • 9. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 9Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaHow do you get acredit card?Examine credit card offers• Displays main costs of a potentialcredit cardComplete an application
  • 10. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 10Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaGetting a CreditCard- RestrictionsMust be at least 21 years oldIf someone agrees to be a co-signer on an account,they are equally responsible for the loanIf someone agrees to be a co-signer on an account,they are equally responsible for the loanUNLESSShow proof ofsufficient incomeHave a co-signer
  • 11. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 11Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaWhat are the advantagesand disadvantages tousing a credit card?• Convenient• Useful for emergencies• Often required to hold areservation• Purchase expensive itemsearlier• Possibility of receivingbonuses, such as frequentflyer miles and cash rebates• Paying interest if balance iskept on card• Additional fees may apply ifcard is not used properly• Tempting to overspend• Responsible for lost/stolencards• Risk of identity theftAdvantages Disadvantages
  • 12. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 12Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaResponsible CreditCard UseDo Don’t• Pay amount charged in fullevery month• Pay payments on time• Keep track of charges bykeeping receipts• Check monthly credit cardstatement for errors• Make late payments• Pay only the minimumpayment due• Go over the credit limit• Charge items that can’t bepaid off within the month
  • 13. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 13Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaWhat happens when acredit card is usedirresponsibly?Late PaymentFeeOver-the-Limit FeePenalty APR• Charged whenminimumpayment is notmade by duedate• Charged if theamount oftransactionsgoes overcredit limit• Higherinterest ratecharged onnewtransactions
  • 14. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 14Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaWhat is a CreditCard Statement?PurposeIncludesWhy is it important to examine a credit cardstatement?Why is it important to examine a credit cardstatement?• Summarizes important information from previousmonth• Transactions made• Amount owed• Minimum payment• Payment due date (date minimum payment isdue)
  • 15. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 15Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaCredit CardSafety TipsIt is important to keep credit cards and credit cardinformation secure to avoid someone else makingchargesIt is important to keep credit cards and credit cardinformation secure to avoid someone else makingcharges
  • 16. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 16Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaCredit CardSafety TipsImmediately reporting a lost or stolen credit card reducesthe cardholder’s liability for any possible fraudulentpurchasesImmediately reporting a lost or stolen credit card reducesthe cardholder’s liability for any possible fraudulentpurchases
  • 17. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 17Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaSummary• Plastic card that holds pre-approved credit• Used for the purchase of items now and payment of them laterPay the credit card balance in full every month!Debit card- money is taken from the cardholder’s accountCredit card- money is borrowed and paid back later
  • 18. 2.4.1.G1© Family Economics & Financial Education – November 2010– Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards – Slide 18Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of ArizonaRemember….• If a credit card is used properly it canoffer many benefits• Important to keep credit cards andcredit card information secure• Use a credit card responsibly! Onlycharge items when there is no doubtabout ability to pay off the charges