1. CARE Credit Abuse Resistance Education Program provided by the United States Bankruptcy Court for the District of Colorado

2. Teens surveyed reported spending 98% of their money, rather than saving it Why CARE?

3. 68% of teens report never discussing responsible credit card use with any family member

4. Graduating college students average $20,402 of debt with $3,262 on credit cards

5. 84% percent of undergraduates indicated they needed more education on financial management topics. In fact, 64% would have liked to receive information in high school and 40% as college freshmen.

6. Credit is the ability to borrow money Credit is the ability to borrow money Borrowing money creates debt Borrowing money creates debt Debt is what you owe Debt is what you owe It costs to borrow money It costs to borrow money What is credit?

7. 1. Long Term Credit - payments made over several months or years Mortgages Mortgages Car Loans Car Loans Student Loans Student Loans 2. Short Term Credit – single payments Utility Bills Utility Bills Cable/Satellite Cable/Satellite Cellular phone bills Cellular phone bills Types of Credit

8. Use a checking account or debit card Use a checking account or debit card Pay all bills on time Pay all bills on time paying for your own cell phone might be a great place to start! paying for your own cell phone might be a great place to start! Take out a small loan from a bank and repay it timely Take out a small loan from a bank and repay it timely How would I start using credit?

9. A debit card works just like a check A debit card works just like a check The money for the purchase comes directly from your bank account The money for the purchase comes directly from your bank account You must have money in the bank account to use the card You must have money in the bank account to use the card cant spend what you dont have cant spend what you dont have Many places prefer debit cards over checks or do not accept checks at all Many places prefer debit cards over checks or do not accept checks at all Debit cards are different from Credit cards

10. Interest is the amount that a lender charges to borrow money Interest is the amount that a lender charges to borrow money The higher the interest rate, the more money you pay The higher the interest rate, the more money you pay Interest rates vary from credit card company to credit card company Interest rates vary from credit card company to credit card company What is Interest?

11. Credit Card Costs and Fees Finance Charges Finance Charges Over-the-Limit Fees Over-the-Limit Fees Balance Transfer Fees Document and Research Fees Cash Advance Fees Cash Advance Fees Reissued Card Fees Reissued Card Fees Universal Default Rate Annual Fees Annual Fees Returned Check Fees Go to www.cardratings.com to find deals

12. A credit report is a history of how well you have paid your bills A credit report is a history of how well you have paid your bills Also collects other financial information about you Also collects other financial information about you Filing for bankruptcy will remain on your credit report for 10 years Filing for bankruptcy will remain on your credit report for 10 years What is a Credit Report?

13. Factors That Negatively Affect Your Credit 1. History of late/past due payments 2. Failure to make payments 3. Having too much credit 4. Having no credit 5. Not leaving a forwarding address 6. Judgments against you/Bankruptcy

14. Emergencies Emergencies Large Purchases Large Purchases Internet Purchases Internet Purchases Establish a Credit History Establish a Credit History Identification Identification Safety Safety Some Good Reasons to have Credit Cards

15. It is very easy to lose track of your purchases It is very easy to lose track of your purchases You end up spending more than you think You end up spending more than you think The convenience of a credit card can be overpowering The convenience of a credit card can be overpowering leads to unnecessary and even foolish purchases. leads to unnecessary and even foolish purchases. Some Downsides to Credit cards

16. Credit Card Control Reasons to reduce or eliminate the credit card habit: 1. Improve your credit rating 2. Save more money and pay less interest 3. Regain control over your life when you control your spending

17. Learning to live within your means will help you get ahead (wants vs. needs) Learning to live within your means will help you get ahead (wants vs. needs) Budgeting creates financial security Budgeting creates financial security Budgeting will keep you out of debt Budgeting will keep you out of debt Saving for the Future

18. Keep track of what you make. Keep track of what you make. Keep track of what you spend. Keep track of what you spend. Ask yourself, how close are they? Ask yourself, how close are they? SO, how do you budget??

19. To make your budget work, you must equalize what you spend with what you make by: 1) Making more 2) Spending less (Sounds easy, huh?)

20. Start making adjustments… Earn more by working more hours Earn more by working more hours Reduce expenses by buying your coffee at 7/11 instead of Starbucks Reduce expenses by buying your coffee at 7/11 instead of Starbucks Be honest with yourself: Do I really need this or do I simply want this? Be honest with yourself: Do I really need this or do I simply want this?

21. Then, stick to your budget! Sticking with a budget is a lifelong process Sticking with a budget is a lifelong process Be flexible Be flexible your budget will change as your life changes your budget will change as your life changes

22. { Lets give you an example What if you bought… Lets give you an example What if you bought…

23. Laptop = $1,300.00 Laptop = $1,300.00 Scanner/printer/fax for $400 Scanner/printer/fax for $400 Software/wireless router for $300 Software/wireless router for $300 TOTAL: $2,000 TOTAL: $2,000

24. you used your credit card you used your credit card you make monthly payments of $300 you make monthly payments of $300 you never miss a payment you never miss a payment annual percentage rate on your card is 8% annual percentage rate on your card is 8%

25. { What will the system end up costing you? (remember, it costs to borrow money) How long will it take to pay for it?

26. Your total cost will be $2052 It will take you SEVEN MONTHS to pay for it

27. Now, instead of an 8% rate, assume that, because your credit rating is poor, you must pay interest at a rate of 24%. Now, instead of an 8% rate, assume that, because your credit rating is poor, you must pay interest at a rate of 24%. Also assume that you pay the MINIMUM MONTHLY PAYMENT of only $50 per month. Also assume that you pay the MINIMUM MONTHLY PAYMENT of only $50 per month.

28. It will take you 82 MONTHS (almost SEVEN YEARS) to pay for it It will take you 82 MONTHS (almost SEVEN YEARS) to pay for it Total payment: $4,085! Total payment: $4,085!

29. Many banks and credit cards are actively seeking younger customers Many banks and credit cards are actively seeking younger customers Understanding how credit works and what kinds of things to avoid when using credit cards is essential before the damage is done Understanding how credit works and what kinds of things to avoid when using credit cards is essential before the damage is done There is a growing crisis in this country with credit card abuse

30. True or False You pay no interest on a debit card purchase.

31. TRUE! A debit card works just like a check.

32. True or False There is a credit report for everyone over age 18.

33. FALSE There is a credit report only for people who have established a credit history. Having no credit history can have adverse consequences. Having no credit history can have adverse consequences.

34. True or False If you are late in making a few payments on your credit card, the interest rate you pay may increase sharply.

35. TRUE For example, on one Platinum VISA card, the interest rate jumps from 4.9% to 30% if you pay late or miss even one payment. Late charges also accrue.

36. True or False If you miss just one or two payments on your credit card, it wont hurt your credit rating.

37. FALSE That negative information can legally remain on your report for up to 7 years.

38. Last one…promise! True or False No one really looks at credit reports.

39. FALSE People who lend you money will almost always review your credit report. Car, home, credit cards. More prospective employers also look at credit reports. You can receive free copies of your credit report each yearworth reviewing!