7.4.2.G1 Understanding Your Credit Card Essentials The Essentials to Take Charge of Your Finances.

7.4.2.G1 Understanding Your Credit Card Essentials The Essentials to Take Charge of Your Finances

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona What is Credit? Why would a person want to use credit? Brainstorm! Credit- when goods, services or money is received in exchange for a promise to pay a definite sum of money at a future date Credit is derived from the Latin word “credo” meaning “I believe”

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Obtaining Credit Borrower (person or organization that is receiving the money) is in need of credit Borrower requests to receive credit from a lender (person or organization who has the resources to provide the borrower money) Lender determines whether to grant the borrower credit based on the borrower’s perceived creditworthiness (an individuals ability and willingness to pay the money back) Why would a lender assess a borrower’s creditworthiness before granting credit?

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Paying Back Credit If approved for credit, the borrower will receive money from the lender Why would a lender charge a borrower interest? Borrower is usually expected to pay interest (the price of money) in addition to the money borrowed Depending on the type of credit, money is paid back in a series of equal or unequal payments

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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 the cardholder’s perceived creditworthiness Cardholders may continue to borrow as long as the credit limit (maximum dollar amount loaned) is not exceeded

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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)

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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 $2,00018%$50.0062 months$1,077.25$3,077.25 $50012%$25.0023 months$60.67$560.67 What are the advantages and disadvantages of using a credit card? Brainstorm!

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Advantages & Disadvantages to using Credit Cards 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 Possibility of receiving bonuses 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 in a short period of time can lower your credit score

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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?

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Creditworthiness Credit card approval depends on the borrower’s perceived creditworthiness according to the lender Lenders assess an individual’s creditworthiness based upon their credit report and/or credit score How a person uses a credit card affects their creditworthiness Creditworthiness

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 16 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 17 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 18 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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 Must direct consumers to the Federal Reserve website (http://www.federalreserve.gov/creditcard/ )to obtain more information about credit cards, including the following sample credit card offerhttp://www.federalreserve.gov/creditcard/

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 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 Advances21.99%  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 Interest rate paid for purchases Multiple interest rates may be listed - final interest rate may depend on creditworthiness of the applicant Credit cards may charge many different types of interest rates

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 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 Advances21.99%  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 Fixed vs. Variable-rate APR Fixed-rate APR- an APR that cannot change during the period of time outlined in a credit card agreement Variable-rate APR- an APR that may change depending on other factors (such as economic conditions) 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

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 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 Advances21.99%  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 Introductory rate- the APR that may be charged after a credit card account is opened Will have a different APR (usually higher) after the introductory period ends Not all credit cards have an introductory rate 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%

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 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 Advances21.99%  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 & Cash Advances A balance transfer is the act of transferring debt from one credit card account to another A cash advance includes withdrawing cash from an ATM using a credit card Balance transfer and cash advance fees may also apply (even if the APR is 0%)

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 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 Advances21.99%  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 Discloses the penalty APR and 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? 28.99%

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 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 Advances21.99%  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 Explains how you can avoid interest charges by paying credit card bills in full every month Minimum Interest Charge Typically range from $0.50 to $2 per month

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 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 Advances21.99%  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 Any set-up and maintenance fees for the card Annual fee- a yearly fee that may be charged for having a credit card What is the annual fee for this credit card? $20 Credit cards may charge many different types of fees

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 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 Advances21.99%  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 Transaction Fees Discloses any transaction fees for the card Balance transfer fees Cash advance fees May be charged in addition to APR

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 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 Advances21.99%  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 Discloses the penalty fees for the card (in addition to Penalty APR) Late-payment- charged when a cardholder does not make the minimum monthly payment by the due date Over-the-limit-charged if the account balance goes over the set credit limit How we calculate your balance Credit card companies can use one of several methods to calculate the outstanding balance on a credit card

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 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 Advances21.99%  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 –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Credit Card Chaos Activity Directions: 1.Two credit card terms will be provided 2.Identify which term is true on your credit card offer 3.Move to the correct side of the room indicated by the arrow on the slide

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Credit Card Chaos Does your credit card offer have a: Fixed-rate APR for Purchases Variable-rate APR for Purchases OR

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Credit Card Chaos Does your credit card offer have a: APR for Purchases greater than or equal to 15% APR for Purchases less than 15% OR

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Credit Card Chaos Does your credit card offer have an Introductory Rate? Introductory Rate No Introductory Rate OR

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Credit Card Chaos Does your credit card offer have a Minimum Interest Charge? Minimum Interest Charge No Minimum Interest Charge OR

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Credit Card Chaos Does your credit card offer have an Annual Fee? Annual Fee No Annual Fee OR

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Credit Card Chaos Does your credit card offer have a Late Payment Fee? Late Payment Fee No Late Payment Fee OR

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Credit Card Chaos Does your credit card offer have a Balance Transfer Fee? Balance Transfer Fee No Balance Transfer Fee OR

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 37 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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 Why is it important to understand how to read a credit card offer?

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 38 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Receiving a Credit Card Generally must be 21 years of age or older UNLESS Show documentation of sufficient income Have a co-signer If someone is a co-signer on an account, they are equally as responsible and their credit report is impacted

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 39 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Want a free T-shirt? Credit Card Companies must stay at least 1,000 feet from college campuses if they offer pizza or other gifts

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 40 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Laws Regulated by the office of the Comptroller of the Currency, Part of Treasury Dept Must give at least 21 day grace period to borrowers Customers must “opt-in” to to over limit fees, other that “Opt-out” the transaction wont go thru” There is a limit on – the amount of interest rate hikes and fees that banks can charge on credit cards – Over the limit fees & Subprime fees

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 41 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona They get to change the rules….. Interest Rates – Can increase after the first year – 45 days notice required for significant changes – CANNOT raise your APR automatically if you miss a payment on a DIFFERENT card – Variable APR’s have no limit to how high they can go on future purchases – Credit companies can slash your limit and close your account

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 42 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Receiving a Credit Card Comparison shop for a credit card Compare credit card offers and determine which card to apply for Complete a credit application A form requesting information about a person’s ability to repay Lenders conduct a credit investigation A comparison of information on credit application to information on a credit report Approval? Applicant may or may not be approved for the card they apply for (depends on creditworthiness) Credit card companies send pre-approved credit card applications in the mail when the individual has passed their initial credit check

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 43 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Transactions Reference NumberTrans DatePost DateDescription of Transaction or CreditAmount XXXX12/222/23Store #1$529.57 XXXX22/252/26Payment$450.00 - XXXX32/26 Cash Advance$318.00 XXXX43/153/17Balance Transfer$785.00 Fees XXXX52/23 Late Fee$35.00 XXXX62/27 Balance Transfer Fee$23.55 XXXX72/28 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 Date4/20/12 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 BalanceAnnual Percentage Rate (APR)Balance Subject to Interest RateInterest Charge Purchases14.99%$512.14$6.31 Cash Advances21.99%$253.50$4.58 Balance Transfers0.00%$637.50$0.00 Summary of Account Activity Previous Balance535.07 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 date3/22/2012 Days in billing cycle30 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 $623 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 those 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 Payment and credit amounts Purchase totals Balance transfer and cash advance totals Fee and interest charges Amount past due New balance Available credit How much did Andrew charge in new purchases during this credit card billing cycle? $529.57 10 9 8 7 6 5 4 3 2 1

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Transactions Reference NumberTrans DatePost DateDescription of Transaction or CreditAmount XXXX12/222/23Store #1$529.57 XXXX22/252/26Payment$450.00 - XXXX32/26 Cash Advance$318.00 XXXX43/153/17Balance Transfer$785.00 Fees XXXX52/23 Late Fee$35.00 XXXX62/27 Balance Transfer Fee$23.55 XXXX72/28 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 Date4/20/12 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 BalanceAnnual Percentage Rate (APR)Balance Subject to Interest RateInterest Charge Purchases14.99%$512.14$6.31 Cash Advances21.99%$253.50$4.58 Balance Transfers0.00%$637.50$0.00 Summary of Account Activity Previous Balance535.07 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 date3/22/2012 Days in billing cycle30 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 $623 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 those 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 10 9 8 7 6 5 4 3 2 1 Payment Information Includes: Total new balance Minimum payment amount Date payment is due Payment due dates must be consistent month to month Monthly statements must be sent at least 21 days before a credit card payment is due What is Andrew’s minimum payment due for this billing cycle? $53.00

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Transactions Reference NumberTrans DatePost DateDescription of Transaction or CreditAmount XXXX12/222/23Store #1$529.57 XXXX22/252/26Payment$450.00 - XXXX32/26 Cash Advance$318.00 XXXX43/153/17Balance Transfer$785.00 Fees XXXX52/23 Late Fee$35.00 XXXX62/27 Balance Transfer Fee$23.55 XXXX72/28 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 Date4/20/12 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 BalanceAnnual Percentage Rate (APR)Balance Subject to Interest RateInterest Charge Purchases14.99%$512.14$6.31 Cash Advances21.99%$253.50$4.58 Balance Transfers0.00%$637.50$0.00 Summary of Account Activity Previous Balance535.07 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 date3/22/2012 Days in billing cycle30 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 $623 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 those 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 10 9 8 7 6 5 4 3 2 1 Late Payment Warning States what will happen if a payment is late- usually additional fees and a higher interest rate Minimum Payment Warning Estimate of how long it can take to pay off a credit card balance if only the minimum payment is made each month How long will it take Andrew to pay off the balance of his credit card if he only pays the minimum payment? 10 years

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Transactions Reference NumberTrans DatePost DateDescription of Transaction or CreditAmount XXXX12/222/23Store #1$529.57 XXXX22/252/26Payment$450.00 - XXXX32/26 Cash Advance$318.00 XXXX43/153/17Balance Transfer$785.00 Fees XXXX52/23 Late Fee$35.00 XXXX62/27 Balance Transfer Fee$23.55 XXXX72/28 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 Date4/20/12 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 BalanceAnnual Percentage Rate (APR)Balance Subject to Interest RateInterest Charge Purchases14.99%$512.14$6.31 Cash Advances21.99%$253.50$4.58 Balance Transfers0.00%$637.50$0.00 Summary of Account Activity Previous Balance535.07 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 date3/22/2012 Days in billing cycle30 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 $623 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 those 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 10 9 8 7 6 5 4 3 2 1 Notice of Changes to Your Interest Rates If a cardholder triggers the Penalty APR, they must be notified 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.

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Transactions Reference NumberTrans DatePost DateDescription of Transaction or CreditAmount XXXX12/222/23Store #1$529.57 XXXX22/252/26Payment$450.00 - XXXX32/26 Cash Advance$318.00 XXXX43/153/17Balance Transfer$785.00 Fees XXXX52/23 Late Fee$35.00 XXXX62/27 Balance Transfer Fee$23.55 XXXX72/28 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 Date4/20/12 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 BalanceAnnual Percentage Rate (APR)Balance Subject to Interest RateInterest Charge Purchases14.99%$512.14$6.31 Cash Advances21.99%$253.50$4.58 Balance Transfers0.00%$637.50$0.00 Summary of Account Activity Previous Balance535.07 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 date3/22/2012 Days in billing cycle30 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 $623 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 those 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 10 9 8 7 6 5 4 3 2 1 Important Changes to Your Account Terms Cardholders must be notified of any raise in rates or fees or any other significant changes to the account at least 45 days before the changes take effect Any changes can only apply to future transactions (new charges) Consumer has the option of closing the account before the changes go into effect

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Transactions Reference NumberTrans DatePost DateDescription of Transaction or CreditAmount XXXX12/222/23Store #1$529.57 XXXX22/252/26Payment$450.00 - XXXX32/26 Cash Advance$318.00 XXXX43/153/17Balance Transfer$785.00 Fees XXXX52/23 Late Fee$35.00 XXXX62/27 Balance Transfer Fee$23.55 XXXX72/28 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 Date4/20/12 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 BalanceAnnual Percentage Rate (APR)Balance Subject to Interest RateInterest Charge Purchases14.99%$512.14$6.31 Cash Advances21.99%$253.50$4.58 Balance Transfers0.00%$637.50$0.00 Summary of Account Activity Previous Balance535.07 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 date3/22/2012 Days in billing cycle30 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 $623 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 those 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 10 9 8 7 6 5 4 3 2 1 Transactions Includes a list of all the transactions that have occurred since the last statement Should be reviewed for errors Fees and Interest Charged Must list the fees and interest charges separately on the monthly statement Did Andrew pay a late fee? Yes, he paid $35.00 for a late fee.

© Family Economics & Financial Education –July 2010 – The Essentials to Take Charge of Your Finances– Understanding a Credit Card Essentials 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 7.4.2.G1 Transactions Reference NumberTrans DatePost DateDescription of Transaction or CreditAmount XXXX12/222/23Store #1$529.57 XXXX22/252/26Payment$450.00 - XXXX32/26 Cash Advance$318.00 XXXX43/153/17Balance Transfer$785.00 Fees XXXX52/23 Late Fee$35.00 XXXX62/27 Balance Transfer Fee$23.55 XXXX72/28 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 Date4/20/12 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 BalanceAnnual Percentage Rate (APR)Balance Subject to Interest RateInterest Charge Purchases14.99%$512.14$6.31 Cash Advances21.99%$253.50$4.58 Balance Transfers0.00%$637.50$0.00 Summary of Account Activity Previous Balance535.07 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 date3/22/2012 Days in billing cycle30 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 $623 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 those 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 10 9 8 7 6 5 4 3 2 1 Year-to-Date Totals Total amount paid in fees and interest charges for the current year What is the total amount of interest Andrew has paid in the year 2012? $18.27 Interest Charge Calculation Includes a summary of the the different types of transactions Why is it important to understand how to read a credit card statement?

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 51 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Truth in Lending Act Limits liability for unauthorized credit card charges to $50.00 per card Must 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

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 52 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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 What are safety tips for using a credit card? Brainstorm!

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 53 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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

7.4.2.G1 © Family Economics & Financial Education –September 2010– The Essentials to Take Charge of Your Finances– Understanding Your Credit Card Essentials – Slide # 54 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 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

7.4.2.G1 Understanding Your Credit Card Essentials The Essentials to Take Charge of Your Finances.

Similar presentations

Presentation on theme: "7.4.2.G1 Understanding Your Credit Card Essentials The Essentials to Take Charge of Your Finances."— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

7.4.2.G1 Understanding Your Credit Card Essentials The Essentials to Take Charge of Your Finances.

Similar presentations

Presentation on theme: "7.4.2.G1 Understanding Your Credit Card Essentials The Essentials to Take Charge of Your Finances."— Presentation transcript:

Similar presentations

About project

Feedback