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How to Manage Credit Cards and Build Credit

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The document provides information about understanding credit cards, including: 1. It defines key terms related to credit cards such as lenders, borrowers, credit, interest, annual percentage rate, minimum payments, and credit limits. 2. It explains the differences between closed-end credit (like loans) and open-end (revolving) credit provided by credit cards. 3. It outlines both the advantages and disadvantages of using credit cards, such as convenience versus the risk of interest fees and overspending. 4. It discusses how responsible or irresponsible use of credit cards can impact an individual's credit history and credit score over time.

Economy & FinanceBusiness
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Understanding Your Credit Card Credit Unit Take Charge of Your Finances
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit When goods, services or money is received in exchange for a promise to pay a definite sum of money at a future date The price of money- when referring to credit, interest is the charge for borrowing money CREDIT- INTEREST-
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Lender and Borrower LENDER- The person or organization who has the resources to provide the individual with a loan BORROWER- The person or organization that is receiving the money from the lender
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Closed-end vs. Open-end Credit Characterist ics Closed-end credit Open-end (revolving) credit Definition A one-time loan Credit extended in advance Purpose of loan Specified in application May be used for a variety of purposes
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Closed-end vs. Open-end Credit Characterist ics Closed-end credit Open-end credit Payments Specified number of equal payments Varies- can be paid in one payment or a series of equal or unequal payments Loan Amount Agreed upon during the application process May be increased for responsible consumers Examples Mortgage, automobile, education loans Credit cards
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card 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 maximum dollar amount loaned Creditworthiness is an individuals ability and willingness to pay the money back
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Interest Interest is charged each month the balance is not paid in full The cost of credit expressed as a yearly interest rate Rate at which interest is charged is referred to as: Annual Percentage Rate (APR)
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Minimum Payments • 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
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Minimum Payments Amount charged to credit card in one purchase APR Minimum payment Time to pay off the credit card Total amount paid in interest Total amount paid $2,000 18% $50.00 62 months $1,077.25 $3,077.25 $500 12% $25.00 23 months $60.67 $560.67
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Advantages to using Credit Cards Advantages Convenient payment tool Useful for emergencies Often required to hold a reservation Able to purchase “big ticket” items and spread out payments Protection against fraud Opportunity to establish a positive credit history Online shopping is safer than using a debit card because of the Fair Credit Billing Act protection Possibility of receiving bonuses, such as frequent flyer miles or cash rebates
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Disadvantages to using Credit Cards Disadvantages Interest can be costly when a balance is revolved Additional penalty fees may apply Tempting to overspend Risk of identity theft Responsible for lost/stolen cards Applying for multiple accounts can lower your credit score
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Debit Cards • What 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?
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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 A number that summarizes an individual’s credit record and history. It is a numeric “grade” of a consumer’s financial reliability Credit Score Credit cards can have a positive or negative impact on an individuals credit history
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Positive Credit Card use Proper credit card use Helps develop positive credit history and credit report Earn a high credit score A 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
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Negative Credit Card Use Consumers with low credit scores have difficulty getting loans, difficulty renting apartments, pay higher interest rates, pay higher insurance rates, and have difficulty obtaining a job Improper credit card use Develops negative credit history and credit report Lower credit score
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 NO Credit • 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
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Offers 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
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Annual Percentage Rate (APR) for Purchases This section discloses the interest paid for purchases on the card. Multiple interest rates may be listed here, because the final interest rate may depend on the creditworthiness of the applicant
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Introductory Rate If the credit card has an introductory rate it will be shown in this section, which is the APR charged during the credit card's introductory period after a credit card account is opened. The card will have a different APR after the introductory period ends What is the introductory rate for this credit card offer? The introductory rate depends on the creditworthiness of the applicant, but it will be 12.99%, 13.99%, or 14.99%
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Variable-rate APR Some cards will have a variable-rate APR, which is an APR that may change depending on other factors, such as the prime rate. The prime rate is an index that represents the interest rate most banks charge their most credit-worthy customers What is the APR for Purchases for this credit card offer? 14.99% Is this a variable-rate APR or a fixed-rate APR? Variable-rate APR
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 APR for Balance Transfers This section discloses the interest paid for balance transfers, which is the act of transferring debt from one credit card account to another. Balance transfer fees may apply, even if the balance transfer APR is 0% What is the APR for balance transfers for this credit card offer? 15.99%
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 APR for Cash Advances This section discloses the interest paid for cash advances, such as withdrawing cash from an ATM using a credit card. Cash advance fees may also apply What is the APR for cash advances for this credit card offer?21.99%
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Penalty APR and When it Applies This section discloses the penalty APR, as well as the penalty terms that trigger the penalty APR to take effect •Penalty APR is the interest rate charged on new transactions if the penalty terms in the credit card contract are triggered What is the Penalty APR for this credit card offer? 21.99%
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 How To Avoid Paying Interest on Purchases This section explains how you can avoid interest charges on a credit card How can a cardholder avoid paying interest on a credit card? By paying credit card bills in full by the due date
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Minimum Interest Charge Credit card companies often have a minimum interest amount. These charges typically range from $0.50 to $2 per month and are disclosed in this section of the credit card offerWhat is the minimum interest charge for this credit card? $1.50
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 For Credit Card Tips from the Federal Reserve Board This section directs consumers to the Federal Reserve website to obtain more information about credit cards
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Set-up and Maintenance Fees This section discloses any set-up and maintenance fees for the card, which can include annual fees, account set-up fees, participation fees, and additional card fees •Annual fee is a yearly fee that may be charged for having a credit card What is the annual fee for this credit card? $20
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Transcation Fees This section discloses any transaction fees for the card, which can include balance transfer fees, cash advance fees, and foreign transaction fees What is the fee for cash advances for this card? $5 or 3% of the amount of each cash advance (whichever is greater)
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Penalty Fees This section discloses the penalty fees for the card, which can include late- payment, over-the-limit, and returned payment fees •Late payment fee is charged when a cardholder does not make the minimum monthly payment by the due date •Over-the-limit fee is charged if the account balance goes over the set credit limitDoes this card have an over-the limit fee? Yes, the over-the-limit fee is $29.
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 How we calculate your balance Credit card companies can use one of several methods to calculate the outstanding balance on a credit card. The method used is disclosed in this section What method is used to calculate the balance on this card? Average daily balance (including new purchases)
Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Loss of Introductory APR If the card has an introductory rate, this area will list how the lower introductory rate can be lost How can the introductory APR be lost on this card? If the cardholder is more than 60 days late in paying the bill What APR will the cardholder be charged if the introductory rate is lost? The Penalty APR of 28.99%
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Chaos • The educator will identify terms associated with a credit card offer • Identify which term is true on your provided credit card offer and move to that poster • In a small group, define the term on the poster • As a class, discuss which credit card characteristic is better for a consumer and why
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Chaos • Fixed-rate APR for Purchases vs. Variable-rate APR for Purchases • Introductory Rate vs. No Introductory Rate • APR for Purchases Greater than or Equal to 15% vs. APR for Purchases Less than 15% • No Minimum Interest Charge vs Minimum Interest Charge • Annual Fee vs. No Annual Fee • Balance Transfer Fee vs. No Balance Transfer Fee • Late Payment Fees vs. No Late Payment Fees
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Benefits • 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
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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 applicant's credit history
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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.
Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement Summary of Account Activity This section includes payments, credits, purchases, balance transfers, cash advances, fees, interest charges, amounts past due, the new balance, available credit, and the last day of the billing period How much did Andrew charge in new purchases during this credit card billing cycle? $529.57 1 0 9 8 7 6 2 4 5 1 3
Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Payment Information This section includes the total new balance, the minimum payment amount, and the date payment is due What is Andrew’s minimum payment due for this billing cycle?$53.00
Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Late Payment Warning This section states any additional fees and the higher interest rate that may be charged if a payment is late How much is Andrew’s late payment fee? $35
Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Minimum Payment Warning This section includes an estimate of how long it can take to pay off a credit card balance if only the minimum payment is made each month, and an estimate of the total amount paid, including interest, if the bill is paid in three years (assuming no additional charges are made) How long will it take Andrew to pay off the balance of his credit card if he only pays the minimum payment?10 years
Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Notice of Changes to Your Interest Rates If a cardholder triggers the Penalty APR, the credit card issuer must notify them on their statement that their rates will be increasing Has Andrew triggered the Penalty APR? Yes, he will pay 28.99% on all transactions made after 4/9/12.
Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Important Changes to Your Account Terms In this section of the statement, cardholders must be notified of any raise in rates or fees or any other significant changes to the account Other than implementation of the Penalty APR, will there be any other changes to Andrew’s account terms?Yes, his APR for Purchases is increasing to 16.99%.
Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Transactions This section includes a list of all the transactions that have occurred since the last statement (purchases, payments, credits, cash advances, and balance transfers). This section should be carefully reviewed by the cardholder to ensure there are no unauthorized charges or errors How much did Andrew charge on his credit card to Store #1? $529.57
Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Fees and Interest Charged Credit card issuers must list the fees and interest charges separately on the monthly statement. Interest charges must be listed by type of transaction Did Andrew pay a late fee? Yes, he paid $35.00 for a late fee.
Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Year-to-Date Totals The total amount paid in fees and interest charges for the current year must be shown on the statement What is the total amount of interest Andrew has paid in the year 2012?$18.27
Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Interest Charge Calculation This section includes a summary of the interest rates on the different types of transactions, account balances, the amount of each, and the interest charged for each type of transaction What interest rate is Andrew paying on cash advances? 21.99%
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights Truth in Lending Act Limits liability for unauthorized credit card charges to $50.00 per cardMust write a letter within 60 days of the first bill containing the error If a credit card number is used fraudulently but the card itself was not used, the individual has no personal liability
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights – To receive a credit card, consumers must be 21 years of age or older • Consumers under 21 have to either have a co-signer or show documentation of sufficient income to make payments • If someone agrees to be a co-signer on an account, they are equally responsible for the loan – Interest rates on existing balances generally can’t be raised unless a cardholder is 60 days or more 2009 CARD Act
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights – Must be notified of any significant changes in rates and fees at least 45 days before the changes take effect • Any changes made to an account can only apply to future transactions (new charges) • Have the option of closing the account before the changes go into effect – Cardholders now have to “opt-in” to allowing transactions that take them over their credit limit 2009 CARD Act
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights – Credit card issuers are required to send a monthly statement at least 21 days before a credit card payment is due – Credit card payment due dates must be consistent month to month 2009 CARD Act
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights – Credit card companies cannot increase rates for the first 12 months after an account is open unless: • The card has a variable interest rate • The cardholder is more than 60 days late in paying their bill • The card has an introductory rate (the introductory rate must be in place for at least 6 months and then the rate can increase) 2009 CARD Act
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights – Some set-up and maintenance fees are charged before the card is used – This may reduce the amount of credit initially available • These non-penalty fees cannot exceed 25% of the initial credit limit • For example, if a card has a credit limit of $1,000 the total fees for the first year (not including penalty fees) cannot exceed $250 2009 CARD Act
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Safety Tips Sign card with a signature and “Please see ID” Do not leave cards lying around, and report lost or stolen cards promptly Close unwanted accounts by writing and phone, then cut up the card Do not give out account numbers unless making a purchase Keep a list of all cards, account numbers, and phone lists separate from cards Shred all pre- approved credit card offers, applications, or solicitations
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Online Shopping Safety Tips 1. Use a temporary credit card number – This is a one-time use only number – A set amount will be charged to your credit card – Then a number will be given to you to do your shopping 2. Use a credit card rather than a debit card – Fair Credit Billing Act
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Fair Credit Billing Act • Helps to protect consumers while using a credit card to make purchases • Allows the consumer to not pay for a product or service for which the consumer has a complaint • If products are not delivered or if it is not what the consumer requested, any amount of money that was credited to the card above the $50.00 fee that consumers are responsible for will be issued back • Debit cards do not have the same protection
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Summary A credit card is pre-approved credit which can be used for the purchase of goods and services now and payment of them later To avoid paying interest on a credit card, pay the balance in full every month A credit card can have a positive or a negative impact on an individual’s credit history
© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Summary Credit card companies are required to disclose the terms and fees of a credit card in the Schumer’s box Credit card statements outline important information about a credit card and should be checked carefully for errors Consumers have many protections and rights in regards to credit card use

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How to Manage Credit Cards and Build Credit

  • 1. Understanding Your Credit Card Credit Unit Take Charge of Your Finances
  • 2. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit When goods, services or money is received in exchange for a promise to pay a definite sum of money at a future date The price of money- when referring to credit, interest is the charge for borrowing money CREDIT- INTEREST-
  • 3. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Lender and Borrower LENDER- The person or organization who has the resources to provide the individual with a loan BORROWER- The person or organization that is receiving the money from the lender
  • 4. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Closed-end vs. Open-end Credit Characterist ics Closed-end credit Open-end (revolving) credit Definition A one-time loan Credit extended in advance Purpose of loan Specified in application May be used for a variety of purposes
  • 5. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Closed-end vs. Open-end Credit Characterist ics Closed-end credit Open-end credit Payments Specified number of equal payments Varies- can be paid in one payment or a series of equal or unequal payments Loan Amount Agreed upon during the application process May be increased for responsible consumers Examples Mortgage, automobile, education loans Credit cards
  • 6. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card 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 maximum dollar amount loaned Creditworthiness is an individuals ability and willingness to pay the money back
  • 7. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Interest Interest is charged each month the balance is not paid in full The cost of credit expressed as a yearly interest rate Rate at which interest is charged is referred to as: Annual Percentage Rate (APR)
  • 8. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Minimum Payments • 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
  • 9. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Minimum Payments Amount charged to credit card in one purchase APR Minimum payment Time to pay off the credit card Total amount paid in interest Total amount paid $2,000 18% $50.00 62 months $1,077.25 $3,077.25 $500 12% $25.00 23 months $60.67 $560.67
  • 10. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Advantages to using Credit Cards Advantages Convenient payment tool Useful for emergencies Often required to hold a reservation Able to purchase “big ticket” items and spread out payments Protection against fraud Opportunity to establish a positive credit history Online shopping is safer than using a debit card because of the Fair Credit Billing Act protection Possibility of receiving bonuses, such as frequent flyer miles or cash rebates
  • 11. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Disadvantages to using Credit Cards Disadvantages Interest can be costly when a balance is revolved Additional penalty fees may apply Tempting to overspend Risk of identity theft Responsible for lost/stolen cards Applying for multiple accounts can lower your credit score
  • 12. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Debit Cards • What 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?
  • 13. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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 A number that summarizes an individual’s credit record and history. It is a numeric “grade” of a consumer’s financial reliability Credit Score Credit cards can have a positive or negative impact on an individuals credit history
  • 14. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Positive Credit Card use Proper credit card use Helps develop positive credit history and credit report Earn a high credit score A 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
  • 15. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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
  • 16. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Negative Credit Card Use Consumers with low credit scores have difficulty getting loans, difficulty renting apartments, pay higher interest rates, pay higher insurance rates, and have difficulty obtaining a job Improper credit card use Develops negative credit history and credit report Lower credit score
  • 17. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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
  • 18. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 NO Credit • 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
  • 19. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Offers 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
  • 20. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Annual Percentage Rate (APR) for Purchases This section discloses the interest paid for purchases on the card. Multiple interest rates may be listed here, because the final interest rate may depend on the creditworthiness of the applicant
  • 21. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Introductory Rate If the credit card has an introductory rate it will be shown in this section, which is the APR charged during the credit card's introductory period after a credit card account is opened. The card will have a different APR after the introductory period ends What is the introductory rate for this credit card offer? The introductory rate depends on the creditworthiness of the applicant, but it will be 12.99%, 13.99%, or 14.99%
  • 22. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Variable-rate APR Some cards will have a variable-rate APR, which is an APR that may change depending on other factors, such as the prime rate. The prime rate is an index that represents the interest rate most banks charge their most credit-worthy customers What is the APR for Purchases for this credit card offer? 14.99% Is this a variable-rate APR or a fixed-rate APR? Variable-rate APR
  • 23. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 APR for Balance Transfers This section discloses the interest paid for balance transfers, which is the act of transferring debt from one credit card account to another. Balance transfer fees may apply, even if the balance transfer APR is 0% What is the APR for balance transfers for this credit card offer? 15.99%
  • 24. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 APR for Cash Advances This section discloses the interest paid for cash advances, such as withdrawing cash from an ATM using a credit card. Cash advance fees may also apply What is the APR for cash advances for this credit card offer?21.99%
  • 25. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Penalty APR and When it Applies This section discloses the penalty APR, as well as the penalty terms that trigger the penalty APR to take effect •Penalty APR is the interest rate charged on new transactions if the penalty terms in the credit card contract are triggered What is the Penalty APR for this credit card offer? 21.99%
  • 26. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 How To Avoid Paying Interest on Purchases This section explains how you can avoid interest charges on a credit card How can a cardholder avoid paying interest on a credit card? By paying credit card bills in full by the due date
  • 27. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Minimum Interest Charge Credit card companies often have a minimum interest amount. These charges typically range from $0.50 to $2 per month and are disclosed in this section of the credit card offerWhat is the minimum interest charge for this credit card? $1.50
  • 28. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 For Credit Card Tips from the Federal Reserve Board This section directs consumers to the Federal Reserve website to obtain more information about credit cards
  • 29. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Set-up and Maintenance Fees This section discloses any set-up and maintenance fees for the card, which can include annual fees, account set-up fees, participation fees, and additional card fees •Annual fee is a yearly fee that may be charged for having a credit card What is the annual fee for this credit card? $20
  • 30. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Transcation Fees This section discloses any transaction fees for the card, which can include balance transfer fees, cash advance fees, and foreign transaction fees What is the fee for cash advances for this card? $5 or 3% of the amount of each cash advance (whichever is greater)
  • 31. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Penalty Fees This section discloses the penalty fees for the card, which can include late- payment, over-the-limit, and returned payment fees •Late payment fee is charged when a cardholder does not make the minimum monthly payment by the due date •Over-the-limit fee is charged if the account balance goes over the set credit limitDoes this card have an over-the limit fee? Yes, the over-the-limit fee is $29.
  • 32. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 How we calculate your balance Credit card companies can use one of several methods to calculate the outstanding balance on a credit card. The method used is disclosed in this section What method is used to calculate the balance on this card? Average daily balance (including new purchases)
  • 33. Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 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 for Balance Transfers 15.99%  This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99%  This APR will vary with the market based on the Prime Rate Penalty APR and When it Applies 28.99% 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 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. How to Avoid Paying Interest on Purchases 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 Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board 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 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  Account Set-up Fee: $20 (one-time fee)  Participation Fee: $12 annually ($1 per month)  Additional Card Fee: $5 annually (if applicable) Transaction Fees  Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)  Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater  Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees  Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000  Over-the-limit: $29  Returned 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 Loss of Introductory APR If the card has an introductory rate, this area will list how the lower introductory rate can be lost How can the introductory APR be lost on this card? If the cardholder is more than 60 days late in paying the bill What APR will the cardholder be charged if the introductory rate is lost? The Penalty APR of 28.99%
  • 34. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Chaos • The educator will identify terms associated with a credit card offer • Identify which term is true on your provided credit card offer and move to that poster • In a small group, define the term on the poster • As a class, discuss which credit card characteristic is better for a consumer and why
  • 35. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Chaos • Fixed-rate APR for Purchases vs. Variable-rate APR for Purchases • Introductory Rate vs. No Introductory Rate • APR for Purchases Greater than or Equal to 15% vs. APR for Purchases Less than 15% • No Minimum Interest Charge vs Minimum Interest Charge • Annual Fee vs. No Annual Fee • Balance Transfer Fee vs. No Balance Transfer Fee • Late Payment Fees vs. No Late Payment Fees
  • 36. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Benefits • 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. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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 applicant's credit history
  • 39. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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
  • 40. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 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.
  • 41. Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement Summary of Account Activity This section includes payments, credits, purchases, balance transfers, cash advances, fees, interest charges, amounts past due, the new balance, available credit, and the last day of the billing period How much did Andrew charge in new purchases during this credit card billing cycle? $529.57 1 0 9 8 7 6 2 4 5 1 3
  • 42. Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Payment Information This section includes the total new balance, the minimum payment amount, and the date payment is due What is Andrew’s minimum payment due for this billing cycle?$53.00
  • 43. Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Late Payment Warning This section states any additional fees and the higher interest rate that may be charged if a payment is late How much is Andrew’s late payment fee? $35
  • 44. Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Minimum Payment Warning This section includes an estimate of how long it can take to pay off a credit card balance if only the minimum payment is made each month, and an estimate of the total amount paid, including interest, if the bill is paid in three years (assuming no additional charges are made) How long will it take Andrew to pay off the balance of his credit card if he only pays the minimum payment?10 years
  • 45. Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Notice of Changes to Your Interest Rates If a cardholder triggers the Penalty APR, the credit card issuer must notify them on their statement that their rates will be increasing Has Andrew triggered the Penalty APR? Yes, he will pay 28.99% on all transactions made after 4/9/12.
  • 46. Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Important Changes to Your Account Terms In this section of the statement, cardholders must be notified of any raise in rates or fees or any other significant changes to the account Other than implementation of the Penalty APR, will there be any other changes to Andrew’s account terms?Yes, his APR for Purchases is increasing to 16.99%.
  • 47. Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Transactions This section includes a list of all the transactions that have occurred since the last statement (purchases, payments, credits, cash advances, and balance transfers). This section should be carefully reviewed by the cardholder to ensure there are no unauthorized charges or errors How much did Andrew charge on his credit card to Store #1? $529.57
  • 48. Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Fees and Interest Charged Credit card issuers must list the fees and interest charges separately on the monthly statement. Interest charges must be listed by type of transaction Did Andrew pay a late fee? Yes, he paid $35.00 for a late fee.
  • 49. Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Year-to-Date Totals The total amount paid in fees and interest charges for the current year must be shown on the statement What is the total amount of interest Andrew has paid in the year 2012?$18.27
  • 50. Transactions Reference Number Trans Date Post Date Description of Transaction or Credit Amount XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7 2/28 2/28 Cash Advance Fee $10.90 Total Fees for this Period $69.45 Interest Charged Interest Charge on Purchases $6.31 Interest Charge on Cash Advances $4.58 Total Interest for this Period $10.89 Payment Information New Balance $1784.53 Minimum Payment Due $53.00 Payment Due Date 4/20/12 Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charge Calculation Type of Balance Annual Percentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% $253.50 $4.58 Balance Transfers 0.00% $637.50 $0.00 Summary of Account Activity Previous Balance 535.07 Payments -450.00 Purchases +529.57 Balance Transfers +785.00 Cash Advances +318.00 Past Due Amount +0.00 Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53 Credit Limit $2,000.00 Available credit $215.47 Statement closing date 3/22/2012 Days in billing cycle 30 If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Only the minimum payment 10 years $3,284 $62 3 years $2,232 Notice of Changes to Your Interest Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Important Changes to Your Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. 2012 Totals Year-to-Date Total fees charged in 2012 $90.14 Total interest charged in 2012 $18.27 Andrew’s Credit Card Statement 1 0 9 8 7 6 2 4 5 1 3 Interest Charge Calculation This section includes a summary of the interest rates on the different types of transactions, account balances, the amount of each, and the interest charged for each type of transaction What interest rate is Andrew paying on cash advances? 21.99%
  • 51. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights Truth in Lending Act Limits liability for unauthorized credit card charges to $50.00 per cardMust write a letter within 60 days of the first bill containing the error If a credit card number is used fraudulently but the card itself was not used, the individual has no personal liability
  • 52. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights – To receive a credit card, consumers must be 21 years of age or older • Consumers under 21 have to either have a co-signer or show documentation of sufficient income to make payments • If someone agrees to be a co-signer on an account, they are equally responsible for the loan – Interest rates on existing balances generally can’t be raised unless a cardholder is 60 days or more 2009 CARD Act
  • 53. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights – Must be notified of any significant changes in rates and fees at least 45 days before the changes take effect • Any changes made to an account can only apply to future transactions (new charges) • Have the option of closing the account before the changes go into effect – Cardholders now have to “opt-in” to allowing transactions that take them over their credit limit 2009 CARD Act
  • 54. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights – Credit card issuers are required to send a monthly statement at least 21 days before a credit card payment is due – Credit card payment due dates must be consistent month to month 2009 CARD Act
  • 55. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights – Credit card companies cannot increase rates for the first 12 months after an account is open unless: • The card has a variable interest rate • The cardholder is more than 60 days late in paying their bill • The card has an introductory rate (the introductory rate must be in place for at least 6 months and then the rate can increase) 2009 CARD Act
  • 56. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Cardholder Protections & Rights – Some set-up and maintenance fees are charged before the card is used – This may reduce the amount of credit initially available • These non-penalty fees cannot exceed 25% of the initial credit limit • For example, if a card has a credit limit of $1,000 the total fees for the first year (not including penalty fees) cannot exceed $250 2009 CARD Act
  • 57. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Credit Card Safety Tips Sign card with a signature and “Please see ID” Do not leave cards lying around, and report lost or stolen cards promptly Close unwanted accounts by writing and phone, then cut up the card Do not give out account numbers unless making a purchase Keep a list of all cards, account numbers, and phone lists separate from cards Shred all pre- approved credit card offers, applications, or solicitations
  • 58. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Online Shopping Safety Tips 1. Use a temporary credit card number – This is a one-time use only number – A set amount will be charged to your credit card – Then a number will be given to you to do your shopping 2. Use a credit card rather than a debit card – Fair Credit Billing Act
  • 59. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Fair Credit Billing Act • Helps to protect consumers while using a credit card to make purchases • Allows the consumer to not pay for a product or service for which the consumer has a complaint • If products are not delivered or if it is not what the consumer requested, any amount of money that was credited to the card above the $50.00 fee that consumers are responsible for will be issued back • Debit cards do not have the same protection
  • 60. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Summary A credit card is pre-approved credit which can be used for the purchase of goods and services now and payment of them later To avoid paying interest on a credit card, pay the balance in full every month A credit card can have a positive or a negative impact on an individual’s credit history
  • 61. © Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit Card Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona 1.4.1.G1 Summary Credit card companies are required to disclose the terms and fees of a credit card in the Schumer’s box Credit card statements outline important information about a credit card and should be checked carefully for errors Consumers have many protections and rights in regards to credit card use