1. Credit Vs. Debit cards

2. What are Credit Cards? Pre-approved credit which can be used for the purchase of items now and payment of them later.

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4. Why Use a Credit Card? $ Proper use can help establish good credit rating $ Conveniently accepted across United States and abroad $ Emergency buying power $ Additional form of identification $ Record of purchases on bill statement $ Often required to hold a reservation

5. Why Not Use a Credit Card? $ Improper use can damage credit rating $ Higher risk for impulsive buying and overspending $ Debt trap when used unwisely $ Expensive way to borrow due to high interest rates $ Less to spend in the future due to paying off purchases from past $ Possible hidden fees & surcharges $ Privacy is an increasing concern $ Identity theft easier

6. Obtaining a Credit Card $ Comparison shop when choosing the right card $ Know the facts ¢ Terms and conditions of credit card accounts differ ¢ Be aware of “hidden” costs of card(s) $ Federal Truth in Lending Act ¢ Requires card issuer to display the cost of credit card ¢ Schumer Box: easy to read box format

7. A Schumer Box you May Expect To See Annual Percentage Rate for purchases and balance transfers* 2.99% APR (.00819% daily periodic rate) on purchases and balance transfers until the first day of the billing cycle that includes the six (6) month anniversary date of the opening of your account. In the absence of the introductory rate, 12.99% APR(.03559% daily periodic rate) on purchases and balance transfers.** Grace period for repayment of the balance for purchases You will have a minimum of 25 days without a finance charge on new purchases if the total New Balance is paid in full each month by the statement closing date. Method of computing the balance used in calculating finance charges for purchases Average daily balance (including new purchases) Annual fee$25 Minimum finance chargeFor each Billing Period that your Account is subject to a finance charge, a minimum total Finance Charge of $0.50 will be imposed. Miscellaneous feesCash advance fee: 2.5% of amount of the cash advance, but not less than $2.50. Late payment fee: $25 Over-the-credit-limit fee: $25 Returned check fee: $25

8. $ Annual Percentage Rate (APR): interest rate charged for amount borrowed in terms of percentage per year $ Grace Period: amount of time allowed before finance charges (interest or cost of credit) are applied Annual Percentage Rate for Purchases Grace Period for Purchases Minimum Finance Charges Balance Calculation Method for Purchases Annual FeesTransaction Fees for Cash Advances Late Payment Fees 19.9% Not less than 25 days $.50 when a finance charge at a periodic rate is charged Average daily balance method (including new purchases) $20 per year 2% with a minimum fee of $3 $29 A Schumer Box and Credit Card Terms Explained

9. $ Minimum Finance Charge: minimum amount charged for card use $ Balance Calculation Method: method used to determine balance including finance charges Annual Percentage Rate for Purchases Grace Period for Purchases Minimum Finance Charges Balance Calculation Method for Purchases Annual FeesTransaction Fees for Cash Advances Late Payment Fees 19.9% Not less than 25 days $.50 when a finance charge at a periodic rate is charged Average daily balance method (including new purchases) $20 per year 2% with a minimum fee of $3 $29 A Schumer Box and Credit Card Terms Explained

10. $ Annual Fees: yearly charge for credit card ownership $ Cash Advance Transaction Fees: cash withdrawal fees $ Late Payment Fees: penalty fee for payments not made by the due date Annual Percentage Rate for Purchases Grace Period for Purchases Minimum Finance Charges Balance Calculation Method for Purchases Annual FeesTransaction Fees for Cash Advances Late Payment Fees 19.9% Not less than 25 days $.50 when a finance charge at a periodic rate is charged Average daily balance method (including new purchases) $20 per year 2% with a minimum fee of $3 $29 A Schumer Box and Credit Card Terms Explained

11. Opening a Credit Account 1.Applicant completes a credit application 2.Lender conducts a credit investigation 3.Applicant is given a credit rating 4.Lender accepts or denies the credit request 5.If accepted, applicant evaluates the credit card details (USE THE SCHUMER BOX!) 6.Applicant accepts or refuses credit terms

12. Understanding the Bill $ Minimum Payment Due: minimum amount to be paid ¢ If this amount is paid and a balance is left on the account, additional finance charges will be included in the following month’s balance $ Past Due Amount: the previous amount due which was not paid before the due date $ Due Date: the day by which the company requires a payment to be made $ New Balance: the total amount owed on a credit card

13. Understanding the Bill (continued) $ Credit Line: the maximum amount of charges allowed to an account $ Closing Date: last day for transactions to be reported on the statement $ Charges, Payments, and Credits: the transactions which occur with the use of a credit card $ Finance Charge: charges assessed for credit card use

14. Using a Credit Card Properly $ Only use when there is no doubt about ability to pay-off the charges at the end of the billing cycle $ Record all expenses and keep receipts $ Check credit statement for errors $ Always pay off balance completely and timely

15. Sign card with signature and “Please See ID” Do not leave cards lying around Close unused accounts in writing and by phone, then cut up the card Do not give out account number unless making purchases Keep a list of all cards, account numbers, and phone numbers separate from cards Report lost or stolen cards promptly Safety Tips

16. Are Debit Cards a type of Credit Card? NO! Debit=Credit Debit cards allow payment and purchase to happen simultaneously Debit Cards are: $ Not the same as credit cards $ Not a form of credit at all $ Directly linked to your bank account.

17. What are debit Cards? Debit card is a plastic card which provides a alternative payment method to cash when making purchases.

18. Why Use a debit Card? $ It is used instead of a check to make purchases, anywhere Visa is accepted $ It is used instead of a credit card to pay bills such as utilities, insurance and car payments $ Point-of-sale funds are drawn from primary checking account $ PIN-system security $ Change your PIN at any Merchants Bank branch $ No annual fee $ Choose from three card designs

19. Why Not Use a debit Card? $ Some banks are now charging over-limit fees or non- sufficient funds fees based upon pre-authorizations. $ Many merchants mistakenly believe that amounts owed can be "taken" from a customer's account after a debit card (or number) has been presented. $ In some countries debit cards offer lower levels of security protection than credit cards.

20. This highly competitive market has resulted in impressive card growth Debit Cards Cheques Cash High take up of cards Credit Cards Cash is the largest volume 129% -11% +11% +20%

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