Credit Cards Independent Living. Why learn about credit/credit cards?! 9 out of 10 American...
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Transcript of Credit Cards Independent Living. Why learn about credit/credit cards?! 9 out of 10 American...
Credit CardsIndependent Living
Why learn about credit/credit cards?!
9 out of 10 American families use credit Mortgage, Medical, credit cards, etc.
An average American family has… 2.5 credit cards $2,400 in charges Pays $441+ per year in interest charges
1/6 families feel out of control with their credit cards and keeps on charging
1/10 families only make minimum payments and keeps on charging
1/20 families CAN’T even make minimum payments on all of their cards and yet they keep charging!
The granting of credit: The 3 C’s In order to be approved for credit/borrow
money the creditor will look at the following things:
Capacity: is you’re ability to repay what you charge
Collateral: is what they will take back if you don’t pay (doesn't’t apply for credit cards)
Character: is based on your credit bureau score, past experience with credit cards
Your credit bureau score: What is it?
A score given to each person based on their credit character
Can be anywhere from 0-850
How is it calculated? Payment history Amounts owed Length of history New credit Types of credit
Your credit bureau score: Why is it important?
Your score follows you everywhere and affects everything: Ability to get a loan Ability to get a credit card Ability to rent/buy a home Ability to buy a car
Key terms:APR- annual percentage rate
variable/can change (important to know if you don’t pay off your credit cards)
Key terms:Fees: late fee, over limit fee, etc.
What things can hurt score the most?Maxed out credit cardsBankruptcyMissing a payment
What should you look for when shopping for a credit card?
Low APRDoes it offer rewards?Do they charge fees?
Additional notes: You can officially get a credit card on
your own at age 18 But if you’re under 21 you need to prove
income or have a co-signer
When to get a credit card? If you’re 18, apply with a co-signer now,
start building credit Apply for a store card (Kohl’s, Target,
etc.)