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Plastic Money All Cards Are Not The Same!. A New Class: The Asset Poor Asset Poverty Rates by Race in the United States African AmericanHispanicNative.

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Presentation on theme: "Plastic Money All Cards Are Not The Same!. A New Class: The Asset Poor Asset Poverty Rates by Race in the United States African AmericanHispanicNative."— Presentation transcript:

1 Plastic Money All Cards Are Not The Same!

2 A New Class: The Asset Poor Asset Poverty Rates by Race in the United States African AmericanHispanicNative AmericanAsianWhite 43.2%39.0%34.5%23.1%16.6% An asset-poor household is one in which a sudden halt in income would have serious consequences immediately. Asset poverty is a measure of whether a household can support itself using savings or other available assets for 12 weeks at a poverty-level income.

3 Average Credit Card Debt by Age, Income and Race/Ethnicity

4 Types of Expenses Contributing to Credit Card Debt

5 Debit Cards: The Pay Now Card  Benefits  No bulky checkbook or large sums of cash.  Widely accepted.  Fast, easy payment process.  Easier qualification.  Disadvantages  Mistaken for credit cards and used in place sometimes.  No grace period.  Some have monthly or pre-transaction fees.  Many now have zero-liability for unauthorized purchases.  Dispute concerning purchases usually handled by consumer.

6 Using Your Debit Cards: Same as writing a check. If you lose your debit card or the PIN is stolen, it is like losing cash. No protection from fraud. Usable at ATM or a point-of-sale (POS) terminal with your personal identification number, or PIN. Usable at stores and restaurants that accept credit cards, without providing your PIN. You will be asked to sign a receipt.

7 If your Debit Card is Lost or Stolen: –Alert your bank as soon as possible. –The longer you wait, the more money you might be responsible for if an unauthorized person uses your card to buy things.

8 Credit Cards The Cornerstone of the U.S. Economy

9 How Credit Card Companies Make Their Money: “Let Me Count the Ways!” 1.Application Fee Zero - $ Annual Fee Zero - $ A.P.R.Zero – 19.95% 4.Cash advance for APR 19.95% minimum 5.Balance transfer 19.95% 6.Processing Fee Zero – 34% 7.Late Fees$ Over the Limit Fee$ Foreign Currency transaction3% 10.Cash Advances (NYCE, Plus)Greater of $3 or 3% of advanced cash 11.Minimum Finance Change$ Institution Charge % of bill and $.50 processing fee

10 The New and Improved Schumer Box

11 Do I Even Need A Credit Card? Advantages:  Able to buy needed items now  Don’t have to carry cash  Creates a record of purchases in case of identity theft (SS #)  More convenient than writing checks  Consolidates bills into one payment  Establishes credit record and score  If the item is faulty or defective, card company will fight the return  If your card is stolen, you are only responsible for $50.00 (caveat emptor) Disadvantages:  Interest (higher cost of items)  May require additional fees  Financial difficulties may arise if one loses track of how much has been spent each month  Increased impulse buying may occur  Only spend what is in my debit account, keeps me on budget.  If I lose my debit card, crooks can only access what cash is in account.  Two-cycling billing calculates interest based on two billing cycles.  Know, if there is a grace period.

12 Pre-Paid Money Cards

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14 Key Features of Prepaid Cards  Can pay household bills with the card.  Safer than cash and most deposits are FDIC insured.  If networked branded (VISA, Plus, NYCE logo), accepted wherever these accounts are accepted.  No credit check or ChexSystems verification to open.  Most allow for direct deposit and transferring of funds  Can use ATM’s for withdrawals  Cash back with purchases  Can be less expensive than check cashing, money orders, or checking account fees  Most cannot be overdrawn, and fees are easier to figure out.  Account updates are accessible online, by phone, or texting.  Funds loaded are immediately available.

15 Disadvantages of Pre-paid Cards  Mistaken for credit cards and used in place sometimes.  Do not pay interest on fund balance.  Many now have zero-liability for unauthorized purchases.  Dispute concerning purchases usually handled by consumer.  Using an ATM, may cost you two fees (ATM & bank).  Few cards report to bill paying to credit agencies so your credit score will not be improved.  Fee structures vary widely, and some fees being excessive.  There is no one best card, you need to shop around and compare to avoid hidden fees.

16  Activation fee (Can be waived, but $5)  Monthly fees (can depend on account $6)  ATM use fee, if not in network ($30)  International use fee (withdrawals and conversion)  Inactivity fees (for $2 - $3 per month)  Overdraft or shortage fees - $3)  Small dollar loan fees (varies on rate)  Teller cash advance fee($2.50)  Balance inquiry and declined withdrawal fees ($.50)  Car replacement fee for lost card ($6.00)  Reload fee, if done at retail location ($3 - $5)  Expedited card delivery ($20)  Second card fee ($5) Common Fees for Prepaid Cards


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