Escolar Documentos
Profissional Documentos
Cultura Documentos
LEARNING OUTCOMES
Students will identify key terms associated with credit.
Students will identify how credit cards work and understand the impact of interest.
Students will understand how credit decisions affect future decisions.
TYPES OF CARDS
A credit card is a system of payment named after the small plastic card issued to users of the system where the issuer lends money to the consumer/user to be paid later to the merchant.
There are different types of cards: Credit Card Secured Credit Cards Prepaid Credit Cards Charge Card DID YOU KNOW? The credit card was first referred to in the 1880sbut not a reality until the 1920sthe first type of card used to pay multiple merchants came about in the 1950s (Diners Club, Carte Blanche, and American Express)
CREDIT TERMS
Card Issuing BankThe financial institution that bills the consumer for repayment and accepts risk for fraudulent activity. Interest is a fee charged by the creditor, calculated monthly or annually. Interest ExpensesThe profit the banks make by charging interest. Banks actually receive their money at a lower rates; therefore; making money. As interest rates climb, the less they maketherefore, they increase their rates to you
CREDIT TERMS
CREDIT REPORTA history of how youve paid your bills, how much open credit you have, and anything else that affects credit worthiness CREDIT SCOREA Three digit score that tells a lender a prediction with some accuracy how likely a borrower is to repay a loan and make payments on time (range from 300-850)
CREDIT TERMS
CREDIT SCORE (cont)35 percent is based on payment history; 30 percent is based on outstanding debt; 15 percent is based on the length of time you have had credit; 10 percent is based on new credit (opening new credit accounts will negatively affect your score for a short termEVERYTIME YOU APPLY FOR CREDIT AND ARE APPROVED OR DENIEDIT IMPACTS YOUR CREDIT)
MONEY
WATCH THE FOLLOWING VIDEO AND IDENTIFY SOME OF THE ISSUES INVOLVING CREDIT!
VIDEO RESULTS
WHAT DID WE SEE IN THE VIDEO?
Credit Choices now impact future decisions. Money decisions now could impact future partner/spouse. Decisions regarding credit affect ability to get exactly what you want. Identity theft and Credit OTHERS?
HELPFUL HINTS
Always sign the back of your card Dont leave receipts behind (ATM, etc.) Dont ever give credit card number over the phone unless youve initiated the call (and not over cordless or cell phones) Ignore credit cards that require you to pay money up front Get your card back after each purchase Check your monthly statement If you get into financial troubles, seek help! Dont just ignore the credit collectorsnegotiateand do it ahead of timedont just wait until they get a hold of you. Create a budget based on your monthly income, determine how much you spend each month, figuring in fixed costs such as rent or car payments and add in variable a expenses, such as groceries. Then, calculate your bottom line by adding all expenses and subtracting total expenses from your effective monthly income. Once you have your bottom line, determine if you are spending too much. These simple steps will help make credit cards manageable and reduce the risk of debt. Set goals for saving
WORDS OF WISDOM!
Credit cards are centered on the idea of taking responsibility for your own actions. As college students, this is the time to take control of your own personal finances and begin to build good credit. Start by being responsible with your credit card usage. Although credit cards give a feeling of power, they do not, in fact, give you more money. They only change the way you pay. The more you understand this concept, the easier it will be to avoid dept and plan for financial success.