1. Get Smart About Credit All credit products subject to qualification. © 2011, 2013 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. Please note: this presentation cannot be altered in any way without first contacting Regional Marketing. IN PERSON PRESENTATIONS ONLY.

2. Keeping Promises Think about a time when you let someone borrow something. Did the person give it back? Did you have an agreement about when you would get the item back? What would you think about that person if they returned your item damaged or never returned it at all? 1 1 Its all about responsibility! The Get Smart About Credit October initiative hosted annually by the American Bankers Association promotes financial education and helps bring credit awareness to your community. This presentation today is provided by Wells Fargo as part its participation in the Get Smart About Credit initiative.

3. Credit The ability to borrow money from a lender with the promise to pay the money back. rest Most lenders charge a fee for the privilege of borrowing money. This fee is called interest. 2

4. Borrowing Money Credit is a privilegeand its granted only to those who have demonstrated their ability to manage their money over time. This is called credit history. Building good credit is key to getting things you want like a car, a college education, or a house. 3

5. Credit Cards It is a Loan -Using a credit card is like getting a short term loan from a bank. You must pay the money back. APR- The interest rate on a credit card is called an annual percentage rate or APR. 4 Never use credit to purchase items you really cant afford.

6. Credit Card basics Credit Limit = this is the maximum amount you can borrow. Balance = the amount you still owe. Know your credit limit and balance 5

7. Practice 1. You charge $100 on a credit card that has a limit of $300. The card has an annual percentage rate of 18%. How long will it take you to pay off the total charge if you pay $20 a month? 6

8. Practice 2. At 18% a year, what will the interest be on the unpaid $80 balance at the end of the first month? 7

9. Practice 3. On the $100 charge, how much will your outstanding balance be a the end of the first month, if you only make a payment of $5? 8

10. Practice 4. Angie is buying an MP3 player for $199 plus 6.5% sales tax. She decides to pay for it in 2 equal installments on her credit card over 2 months. If the interest on the credit card is 18% a year, Angie will pay $4.82 in interest. What is the real cost of the MP3 player to Angie? 9

11. Practice 5. Uh oh – Angie neglected to make her payment on time. As a result, the bank charged her a $20 late fee. Therefore, the total amount Angie ended up paying the bank was $238.94. Had she paid cash, the MP3 player would have cost her $211.94. How much did using a credit card cost her? 10

12. Personal Responsibility Taking personal responsibility means keeping your promise to pay back the money you owe. 11

13. 12 To learn more about money, visit www.handsonbanking.org www.handsonbanking.org