Consumer Credit Counseling Service Consumer Credit Counseling Service of Southern Oregon, Incof Southern Oregon, Inc

www.cccsso.orgwww.cccsso.org

Ashland High SchoolNovember 18

What Is Interest?What Is Interest?

Interest is what you pay for the privilege of Interest is what you pay for the privilege of using someone else’s money.using someone else’s money.

Interest is also paid to you by a financial Interest is also paid to you by a financial institution to use your funds.institution to use your funds.

But I’m still in High School!But I’m still in High School!

Right now you have a clean slateRight now you have a clean slate The best time to prevent debt is nowThe best time to prevent debt is now Knowing how credit cards, car loans, Knowing how credit cards, car loans,

mortgages, and savings work will help mortgages, and savings work will help you make better decisions in the futureyou make better decisions in the future

Wal-mart Television: Wal-mart Television: A A

Wal-mart has a color television on sale for Wal-mart has a color television on sale for $300.00$300.00

The salesperson says you can take home The salesperson says you can take home the television now.the television now.

You have to make a payment of $25.00You have to make a payment of $25.00per monthper month

You have to pay 24% interest to Wal-mart You have to pay 24% interest to Wal-mart to take home your TV now. to take home your TV now.

PayPay InterestInterest PrincipalPrincipal BalanceBalance

11stst month month $ 25.00$ 25.00 $ 6.00$ 6.00 $ 19.00$ 19.00 $ 281.00$ 281.00

22ndnd month month $ 25.00$ 25.00 $ 5.62$ 5.62 $ 19.38$ 19.38 $ 261.62$ 261.62

33rdrd month month $ 25.00$ 25.00 $ 5.23$ 5.23 $ 19.77$ 19.77 $ 241.85$ 241.85

44thth month month $ 25.00$ 25.00 $ 4.84$ 4.84 $ 20.16$ 20.16 $ 221.69$ 221.69

………………………… ………………………… ………………………… ………………………… …………………………

1313thth monthmonth

$ 25.00$ 25.00 $ .90$ .90 $ 24.10$ 24.10 $ 21.07$ 21.07

TotalsTotals $ 346.07$ 346.07 $ 46.07$ 46.07

Wal-Mart Television A

Wal-mart Television: Wal-mart Television: BB

Wal-mart has a color television on Wal-mart has a color television on sale for $300.00sale for $300.00

You want to save $25.00 per month You want to save $25.00 per month towards buying a $300.00 TV.towards buying a $300.00 TV.

Your bank will pay you 2% interest Your bank will pay you 2% interest on your savings accounton your savings account

BeginningBeginning You PayYou Pay Old Old BalanceBalance

The The Bank’sBank’s

New New BalanceBalance

11stst month month $ 0.00$ 0.00 $ 25.00$ 25.00 $ 25.00$ 25.00 $ 0.50$ 0.50 $ 25.50$ 25.50

22nd nd monthmonth $ 25.50$ 25.50 $ 25.00$ 25.00 $ 50.50$ 50.50 $ 1.01$ 1.01 $ 51.51$ 51.51

33rdrd month month $ 51.51$ 51.51 $ 25.00$ 25.00 $ 76.51$ 76.51 $ 1.53$ 1.53 $ 78.04$ 78.04

44thth month month $ 78.04$ 78.04 $ 25.00$ 25.00 $ 103.04$ 103.04 $ 2.06$ 2.06 $ 105.10$ 105.10

………………………… …………………… ……………… …………………… …………………… ……………………

1111thth monthmonth

$ 279.22$ 279.22 $ 25.00$ 25.00 $ 304.22$ 304.22 $ 6.08$ 6.08 $ 310.30$ 310.30

Wal-Mart Television B

Best Buy’s Credit Card Offer Best Buy’s Credit Card Offer

• Apple® - iPod touch® 64GB* MP3 Player (4th Generation - Latest Model) – Black• $399.99• 18 Months .. No interest Plan

No Interest storewide on all purchases if paid in full within 18 months

Interest will be charged to your account from the purchase date if the purchase balance is not paid in full within 18 months or if you make a late payment. Minimum total purchase of $249 required. Required minimum payments is greater of $10 or 1% of balance, plus billed interest charges, plus any late fees, or it can also be 2.5% of balance if card issued by Chase. Online and in-store offers may vary.

HSBC Financing Info:On approved purchases on the Best Buy consumer credit card by HSBC Bank Nevada, N.A. Min. interest charge = $2. Certain rules apply to the allocation of payments and interest charges on your promotional purchase if you make more than one purchase on your credit card. Call 1-888-367-4310 or review your cardholder agreement for further information.

HSBC Deferred Interest Info Variable APRs as of 10/01/2010:Plan A: For Accounts generated on or after 06/29/10: Variable Standard Rate APR: 25.24%. Variable Penalty Rate APR: 29.99%. For Accounts generated before 06/29/10: Variable Standard Rate is 24.24%. Variable Penalty Rate is 29.24%. Plan B: Variable Standard APR: 27.99%. Variable Penalty APR: 29.99%.

Best Buy iTouch…Best Buy iTouch…..

No Interest storewide on all purchases if No Interest storewide on all purchases if paid in full within 18 monthspaid in full within 18 months

Interest will be charged to your account Interest will be charged to your account from the purchase date if the purchase from the purchase date if the purchase balance is not paid in full within 18 balance is not paid in full within 18 months or if you make a late payment.months or if you make a late payment.

Variable Penalty Rate APR: 29.99%. Variable Penalty Rate APR: 29.99%.

Balance Payment New Balance

1st $ 399.99 $ 22.00 $ 377.99

2nd $ 377.99 $ 22.00 $ 355.99

3rd $ 355.99 $ 22.00 $ 333.99

………

…………………………

………………

………………

17th $ 47.99 $ 22.00 $ 25.99

18th $ 25.99 $ 25.99 $ 0.00

Best Buy iTouchBest Buy iTouchThe way you hope it works

Best Buy iTouchBest Buy iTouch

Balance Payment 2.5% Int. New Balance

1st $ 399.99

$ 22.00 $ 10.00 $ 387.99

2nd $ 387.99

$ 22.00 $ 9.70 $ 375.69

3rd $ 375.69

$ 22.00 $ 9.39 $ 363.08

…………

………… ……………

…………

…………………

18th $ 149.61

$ 22.00 $ 3.74 $ 131.35

24th $ 32.97 $ 22.00 $ 0.82 $ 11.79

25th $ 11.79 $ 11.79 $ 0.00 $ 0.00

Totals $ 539.79 $ 139.80

The way it most likely will happen

40” Flat Screen TV40” Flat Screen TV The flat screen costs $1800The flat screen costs $1800 Sears is letting you take home the TVSears is letting you take home the TV They are charging you 18% interestThey are charging you 18% interest You have to pay a minimum of 2.5% of the You have to pay a minimum of 2.5% of the

balance per month, with a minimum payment of balance per month, with a minimum payment of $10.00$10.00

MonthMonth Min PayMin Pay Int. PaidInt. Paid Prin. Prin. PaidPaid

BalancBalancee

11stst $ 45.00$ 45.00 $ 27.00$ 27.00 $ 18.00$ 18.00 $ $ 1,7821,782

22ndnd $ 44.55$ 44.55 $ 26.73$ 26.73 $ 17.82$ 17.82 $1764.1$1764.188

33rdrd $ 44.10$ 44.10 $ 26.46$ 26.46 $ 17.64$ 17.64 $1746.5$1746.544

40” Flat Screen Continued40” Flat Screen Continued

MonthMonth Min PayMin Pay Int. PaidInt. Paid Prin. Prin. PaidPaid

BalanceBalance

209209thth $ 10.00$ 10.00 $ 0.46$ 0.46 $ 9.54$ 9.54 $ 21.43$ 21.43

210210thth $ 10.00$ 10.00 $ 0.32$ 0.32 $ 9.68$ 9.68 $ 11.75$ 11.75

211211thth $ 10.00$ 10.00 $ 0.18$ 0.18 $ 9.82$ 9.82 $ 1.93$ 1.93

212212thth $ 1.93$ 1.93 $ 0.00$ 0.00 $ 1.96$ 1.96 $ 0.00$ 0.00

• 212 Months is equal to 17 years 9 months

• Your 40” television cost $1800

• The interest you paid to Sears is: $2,315.32

• The total coast of your television was: $4,115.32

Your Credit Card Statement

Balance Due

Minimum Payment

Interest Rate

Time to Pay Off

Total Cost of

Purchase

$1800 $45.00 18% 18 Year $4100

What is a credit score?

A number that tells people lending you money how safe it is to do that

A number used to determine whether to rent you an apartment

Employers are looking at people’s credit scores to see how they manage their own money.

How do you get a good Credit Score?

• Pay your bills on time

• When you borrow money, pay it back promptly

• Don’t borrow more money than you can comfortably pay back

How do you get a bad score?

• Miss payments entirely

• Make payments that are less than agreed

• Make payments later than agreed

• Spend more than the banks let you

Auto Class 101Auto Class 101

Buying a $12,000 SUVBuying a $12,000 SUV You have saved $ 2,000 towards to You have saved $ 2,000 towards to

down paymentdown payment You have to finance $10,000 to buy You have to finance $10,000 to buy

the carthe car

Auto Class 101Auto Class 101

Amt Amt FinancedFinanced

Interest Interest RateRate

Monthly Monthly PayPay

Total Total InterestInterest

Total Total PaymentPayment

ss

$10,000$10,000 6.5%6.5% $ 168.10$ 168.10 $ $ 2,103.152,103.15

$ 12,103$ 12,103

$10,000$10,000 12.00%12.00% $ 195.50$ 195.50 $ $ 4,076.144,076.14

$ 14,076$ 14,076

$10,000$10,000 18.00%18.00% $ 228.08$ 228.08 $ $ 6,421.616,421.61

$ 16,422$ 16,422

$10,000$10,000 24.00%24.00% $ 263.27$ 263.27 $ $ 8,955.328,955.32

$ 18,955$ 18,955

The Terms: 5 Year Loan

A Higher FICO Score A Higher FICO Score Saves You MoneySaves You Money

30 Year Mortgage30 Year Mortgage

Loan Amount Loan Amount $200,000$200,000

FICO FICO ScoreScore

APR*APR* Monthly Monthly PaymentPayment

Total Int. Total Int. PaidPaid

Money Money SavedSaved

760-760-850850

4.47%4.47% $ 1,010$ 1,010 $163,60$163,6000

************

700-700-759759

4.69%4.69% $ 1,034$ 1,034 $173,32$173,3200

$ 9,720$ 9,720

640-640-659659

5.52%5.52% $ 1,139$ 1,139 $210,04$210,040 0

$ $ 46,40046,400

620-620-639639

6.08%6.08% $ 1,209$ 1,209 $235,24$235,2400

$ $ 71,64071,640

Please fill out the evaluation We appreciate the input Thanks….. And Go Grizz

541-779-2273www.cccsso.org