Credit card basics

1,178 views

Published on

1 Comment
1 Like
Statistics
Notes
  • Nice explanation on credit cards for more information related to credit cards you can visit mymoneykarma.com. Before you apply for any of the fintech product recommend to have a free credit score check. Refer https://www.mymoneykarma.com/credit-score.html
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total views
1,178
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
29
Comments
1
Likes
1
Embeds 0
No embeds

No notes for slide

Credit card basics

  1. 1. Unders tanding Your Credit Card Credit Unit tC ard Take Charge of Your FinancesCr edi
  2. 2. 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.
  3. 3. 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
  4. 4. 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
  5. 5. 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
  6. 6. 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
  7. 7. 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 amount loaned to pay the money back
  8. 8. 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
  9. 9. 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
  10. 10. 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
  11. 11. ard t C ard edi t CCr edi Using a Credit CardCr Advantages Disadvantages
  12. 12. 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
  13. 13. 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
  14. 14. 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?
  15. 15. 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
  16. 16. 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
  17. 17. 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
  18. 18. 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
  19. 19. 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
  20. 20. 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
  21. 21. 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
  22. 22. 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 4.Do any of the above on another account that you have with us. Annual Percentage Rate 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 (APR) for Purchases 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. This section discloses the 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/creditcard interest paid for purchases on Feder al Res erv e Boar d Feesthe card. Multiple interest rates 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. may be listed here, because the •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) final interest rate may depend Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) on the creditworthiness of 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 applicant 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
  23. 23. 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 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% shown in this section, which is 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: the APR charged during the 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.credit cards introductory period 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 Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases opened. The card will have a 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 different APR after the Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar d introductory period ends 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 assigned the minimum credit limit of $250, initial available credit will be only about $209. What is the introductory rate for •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) this 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 The introductory rate depends • greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is on the creditworthiness of the • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars applicant, but it will be 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 12.99%, 13.99%, or 14.99% • 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
  24. 24. 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. AP R for Balance 15.99% an APR that may change Trans fers AP R for Cash •This APR will vary with the market based on the Prime Rate 21.99% Adv ances •This APR will vary with the market based on the Prime Ratedepending on other factors, such 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; as the prime rate. The prime 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.rate is an index that represents 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 the interest rate most banks Paying I nter est on Pu rchases 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 their most credit-worthy 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 customers 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 yourWhat is the APR for Purchases 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) •Addit ional Card Fee: $5 annually (if applicable) 14.99% 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 Is this a variable-rate APR • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars or a fixed-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 Variable-rate APR • 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
  25. 25. 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 Trans fers 15.99% •This APR will vary with the market based on the Prime RateThis section discloses the interest 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% paid for balance transfers , 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 which is the act of transferring 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.debt from one credit card account 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. Pu rchases to another. Balance transfer fees Minimum I nter est Charge If you are charged interest, the charge will be no less than $1.50. may apply, even if the balance 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 Feder al Res erv e Boar d transfer APR is 0% Set -up and Fees 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 What is the APR for balance •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) transfers for this credit card offer? 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 15.99% • 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
  26. 26. 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 4.Do any of the above on another account that you have with us. APR for Cash Advances 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 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. paid for cash advances, such as 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 websitewithdrawing cash from an ATM Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar dusing a credit card. Cash advance 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 fees may also apply 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) Trans action Fees •Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater What is the APR for cash advances •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 for this credit card offer? 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 21.99% • 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
  27. 27. 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. AP R for Balance 15.99% •This APR will vary with the market based on the Prime RateThis section discloses the penalty Trans fers AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime RateAPR, as well as the penalty terms 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; that trigger the penalty APR to 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 take effect H ow to Av oid reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. 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•Penalty APR is the interest 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 websiterate charged on new transactions Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar dif the penalty terms in the credit 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 arecard contract are triggered 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) 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 What is the Penalty APR for this • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars credit card offer? 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 21.99% • 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
  28. 28. 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 4.Do any of the above on another account that you have with us. How To Avoid Paying H ow to Av oid 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. Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Interest on Purchases 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.This section explains how you 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/creditcardcan avoid interest charges on a Feder al Res erv e Boar d Fees credit card 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)How can a cardholder avoid paying •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) interest on a credit card? 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 By paying credit card bills • 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 in full by the due date • 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
  29. 29. 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: Minimum Interest 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or Charge 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 often 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. have a minimum interest 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 website amount. These charges Tips fr om the Feder al Res erv e Boar d of the Federal Reserve Board at http://www.federalreserve.gov/creditcardtypically range from $0.50 to 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 $2 per month and 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)disclosed in this section of the Trans action Fees •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is credit card offer • 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: $29What is the minimum interest charge • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” for this credit card? * 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 $1.50
  30. 30. 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 4.Do any of the above on another account that you have with us. For Credit Card Tips 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 anyfrom the Federal Reserve Paying I nter est on Pu rchases 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. Board 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/creditcard This section directs Feder al Res erv e Boar d Fees consumers to the Federal 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. Reserve website to obtain •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month)more information about credit Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) cards • 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
  31. 31. 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 Trans fers based on the Prime Rate. 15.99% •This APR will vary with the market based on the Prime Rate up and maintenance fees for 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% the card, which can include When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; annual fees, account set-up 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 fees, participation fees, and 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 Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. additional card fees Pu rchases 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 Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard•Annual fee is a yearly fee Feder al Res erv e Boar d Feesthat may be charged for 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.having a credit card •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 is the annual fee • 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 for this credit 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 • Ov er- the- limit: $29 $20 • 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
  32. 32. 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; Transcation Fees 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. This section discloses any 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 Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases which can include 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 Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard transfer fees, cash advance Feder al Res erv e Boar dfees, and foreign transaction 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 fees 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) What is the fee for cash Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is advances for this card? • greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater $5 or 3% of the 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 amount of each cash • • more than $1000 Ov er- the- limit: $29 R etur ned Payment: $35 advance (whichever is * 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 greater) days late in paying your bill
  33. 33. 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 AP R for Balance 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. 15.99% which can include late- 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 payment, over-the-limit, and 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; returned payment fees 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. H ow long will the Penalty APR apply? If your APR’s are increased for any of these•Late payment fee is 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 Paying I nter est on interest on purchases if you pay your entire balance by the due date each month.charged when a cardholder Pu rchases Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Chargedoes not make the minimum 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/creditcardmonthly payment by the due Boar d Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using yourdate 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•Over-the-limit fee is •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)charged if the account balance 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 isgoes over the set credit limit 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).” Does this card have an * 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 over-the limit fee? Yes, the over-the-limit fee is
  34. 34. 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: How we calculate your 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. balance 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 Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases one of several methods to 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 calculate the outstanding Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar dbalance on a credit card. The 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 method used is disclosed in 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) this section Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • 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 method is used to calculate the 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 balance on this card? • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” Average daily balance * 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 (including new purchases)
  35. 35. 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 AP R for Cash 15.99% •This APR will vary with the market based on the Prime Rate 21.99%If the card has an introductory 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:rate, this area will list how the 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; orlower introductory rate can be 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 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 How can the introductory APR be 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 lost on this card? Boar d Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your If the cardholder is more 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. than 60 days late in paying •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) the bill •Addit ional Card Fee: $5 annually (if applicable) What APR will the cardholder 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 be charged if the introductory • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars rate is lost? 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 The Penalty APR of • 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 28.99% days late in paying your bill
  36. 36. 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
  37. 37. 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
  38. 38. 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
  39. 39. 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…
  40. 40. 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.

×