Module 8.1Online Shopping and Credit Cards

Credit CardsOne of the primary sources of purchases for

most consumers in the country The average American has $10,000 worth of

debt, mostly in credit cardsA credit card is different from a debit card

debit cards remove money from your checking account when a purchase is made

with credit cards, you make monthly payments on your balance

Revolving Credit LoansA consumer line of credit that can be used up to

a certain limit or paid down at any timeYou can use the amount for which you’re

approvedMust be repaid to the credit card issuerIf not paid in full at the end of the month, it will

accumulate interest on the balance dueyou can use up to the approved amount as long

as you continue making payments

(the earlier you pay off, the less interest you’ll pay)

Using CreditSafer than cashWhen you pay with a credit card, the card

company pays the bill for youThey send you a statement (bill) at the end of

each month showing what you purchasedAlso shows: fees and minimum payment

(least amount you can pay on your balance without getting charged fees) owed

Read the FINE PRINT before getting a credit card

Review StatementCredit card companies make mistakesMake sure nobody else is using your cardYou have the right to dispute charges

Explained on the back of the statementDo it in a timely mannerThey can NOT change interest rates without

telling youIf there’s a special introductory rate like 0%

interest, make sure you read to see when it expires

Credit Card StatementPurchases or new charges – list of what

you bought and rate of interest you are paying

Payments and credits – how much you have paid on your balance since the last statement

Due date or pay-by date – pay BEFORE that date

Credit Limit – maximum amount you are allowed to charge. Avoid over-the-limit fees.

Module 8.2Credit Cards: Shopping Online

Online Shopping Tips (2/3 of people use the internet to shop)Know exactly who you’re dealing with

(reputable companies)Know exactly what you’re buyingKnow the terms of the dealKnow exactly how much you will be chargedPay by credit cardPrint and save records of your online

purchasesChecks the site’s security (https:// secure)Check the site’s privacy policy

Buying OnlinePros ConsStores never closeNo parking problemsNo aggressive

salespeopleEasy to compareHard to find productsNo local sales taxBargain prices

Wait for deliveryDelay in receiving

productsS&HReliability of sellers?Can’t negotiate pricesCan’t see product in

personPotential for inferior

products